SBI Mutual Fund announced the launch of the SBI S&P BSE Sensex Index Fund, an open-ended index scheme that aims to replicate the composition of the S&P BSE Sensex Index and to generate returns that are commensurate with the performance of the S&P BSE Sensex Index, subject to tracking errors. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.
The scheme opened for public subscription on May 18, 2023, and will close on May 24, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This is an open-ended exchange-traded fund that aims to replicate the composition of the S&P BSE Sensex Index and to generate returns that are commensurate with the performance of the S&P BSE Sensex Index, subject to tracking errors.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to replicate the composition of the S&P BSE Sensex Index and to generate returns that are commensurate with the performance of the S&P BSE Sensex Index, subject to tracking errors. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹5000 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 | |
| Minimum | Maximum | ||
Stocks comprising the S&P BSE Sensex Index | 95% | 100% | High |
Government Securities including triparty repo and units of liquid mutual fund | 0% | 5% | Low |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such Sensex index fund schemes, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
| Mutual Fund House | Name of the Fund |
| HDFC Mutual Fund | HDFC Index Sensex Plan |
| LIC Mutual Fund | LIC MF Index Sensex Plan |
| Nippon India Mutual Fund | Nippon India Index S&P BSE Sensex Plan |
| ICICI Prudential Mutual Fund | ICICI Prudential S&P BSE Sensex Plan |
| TATA Mutual Fund | Tata S&P BSE Sensex Index Plan |
| UTI Mutual Fund | UTI S&P BSE Sensex Plan |
| Source: Kuvera.in | |
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the S&P BSE Sensex TRI.
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” would be subject to the following conditions.
- For exit on or before 15 days from the date of allotment: 0.20%
- For exit after 15 days from the date of allotment: Nil
Q. Who will manage this scheme?
Raviprakash Sharma is the designated fund manager 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.
