HDFC Mutual Fund announced the launch of the HDFC NIFTY Midcap 150 Index Fund, an open-ended index fund scheme replicating/tracking the NIFTY Midcap 150 Index (TRI).
The scheme opened for public subscription on April 06, 2023, and will close on April 18, 2023, and will re-open for ongoing subscription and redemption within five business days from the date of allotment of units.
Q. What kind of mutual fund scheme is this?
This open-ended index fund scheme invests in the next 150 companies (companies ranked 101-250) based on full market capitalisation from NIFTY 500. This fund scheme is a broad representation of the Indian market.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to generate returns that are commensurate (before fees and expenses) with the performance of the NIFTY Midcap 150 Index TRI (the underlying index), subject to tracking error. There is no assurance that the investment objective of the scheme will be realized.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹100 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
|Instruments||Indicative Allocations (% of total assets)||Risk Profile|
|Securities covered by NIFTY Midcap 150 Index||95||100||Very High|
|Debt Securities & Money Market Instruments, units of Debt Schemes of Mutual Funds||0||5||Low to Medium|
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such Sensed index funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
|Name of the fund||YTD (in %)|
|Motilal Oswal Nifty Midcap 150 Index Fund (MOFMIDCAP)||-3.87|
|ICICI Prudential Nifty Midcap 150 Index Fund||-3.94|
|Aditya Birla Sun Life Nifty Midcap 150 Index Fund||-3.84|
|SBI Nifty Midcap 150 Index Fund||-4.00|
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the NIFTY Midcap 150 Index (TRI). NIFTY Midcap 150 represents the next 150 companies (after the top 100 companies) i.e. companies ranked 101-250 based on full market capitalisation from NIFTY 500. This index intends to measure the performance of mid-market capitalisation companies.
NIFTY Midcap 150 Index is computed using the free float market capitalization method, wherein the level of the index reflects the total free float market value of all the stocks in the index relative to a particular base market capitalization value. The composition of the aforesaid benchmark is such that it is most suited for comparing the performance of the scheme.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” is also “Nil”.
Q. Who will manage this scheme?
Nirman Morakhia and Arjun Agarwal would be the designated fund managers of this scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.