UTI Mutual Fund announced the launch of the UTI Nifty 500 Value 50 Index Fund, an open-ended index fund scheme that seeks to generate returns that are in line with the performance of the Nifty 500 Value 50 Total Return Index, subject to tracking error.
The scheme opened for public subscription on April 26, 2023, and will close on May 08, 2023. The scheme re-opens for continuous sale and repurchase on May 12, 2023.
Q. What kind of mutual fund scheme is this?
This is an open-ended index fund scheme replicating/ tracking the movement of the Nifty 500 Value 50 Total Return Index.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to provide returns that, before expenses, correspond to the total return of the securities as represented by the underlying index, subject to tracking error. 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 | Minimum | ||
| Securities covered by the Nifty 500 Value 50 Index | 95% | 100% | Medium to High |
Debt/Money Market instruments including Triparty Repo on Government Securities or treasury bills and units of Liquid Mutual Funds | 0% | 5% | Low |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such index fund schemes in the market, 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 | Index Fund Scheme |
| Motilal Oswal Mutual Fund | Motilal Oswal Nifty 500 Index Fund (MOFNIFTY500) |
| Source: MoneyControl | |
Q. How will the scheme benchmark its performance?
Nifty 500 Value 50 TRI is the benchmark for UTI Nifty 500 Value 50 Index Fund. The performance of the scheme is benchmarked to the Total Return Variant of the benchmark index which is Nifty 500 Value 50 TRI. The benchmark has been chosen on the basis of the investment pattern/objective of the scheme and the composition of the index.
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?
Sharwan Kumar Goyal is the dedicated Fund Manager of the UTI Nifty 500 Value 50 Index Fund.
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.
