UTI Mutual Fund launched a new fund offer to invest in UTI Nifty Midcap 150 Quality 50 Index Fund. It is an open-ended scheme replicating Nifty Midcap 150 Quality 50 total return index (TRI).
This index entails top 50 companies from its parent Nifty Midcap 150 index, which are selected based on their ‘quality’ scores.
The quality score for each company is determined based on return on equity, financial leverage (except for financial services companies) and earning per share (EPS) growth variability of each stock analysed during the previous five financial years.
The weight of each stock in the index is based on a combination of stock’s quality score and its free float market capitalisation.
Index reconstitution will be done on a semi-annual basis in June and December.
The fund house says that the choice of Nifty Midcap 150 quality 50 has higher exposure than Nifty midcap 150 to sectors with higher ROE and lower earning variability like IT, consumer goods, industrial manufacturing etc.
Returns by Nifty midcap 150 quality 50 TRI
Year | NIFTY Midcap 150 Quality 50 TRI (in %) | Nifty Midcap 150 TRI (in %) | NIFTY 50 TRI (in %) |
1 | 18.4 | 21.6 | 16.9 |
3 | 20 | 22.2 | 17.2 |
5 | 16.4 | 15.5 | 15 |
Since inception | 19.7 | 16.5 | 14.6 |
Also, this index has no exposure to sectors with higher debt to equity ratio like cement, construction, power, telecom, etc.
About the index fund
The investment objective of the scheme is to provide returns which closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error
The investment universe of the fund will be the constituents of NIFTY Midcap 150 Quality 50 Index. The scheme is a low-cost smart beta index Fund which tracks the NIFTY Midcap 150 Quality 50 Index passively.
The scheme will endeavour to replicate the performance of NIFTY Midcap 150 Quality 50 Index.
The top 10 holdings in Nifty midcap 150 Quality 50 index are Page industries (4.49 percent), Tata Elxsi (3.89 percent), Crompton Greaves Consumer Electricals (3.80 percent), ICICI Securities (3.4 percent), Mindtree (3.19 percent), Bharat Electronics (2.88 percent), Voltas (2.88 percent), Mphasis (2.78 percent), Supreme Industries (2.68 percent) and Astral (2.56 percent).
Key details of the fund scheme:
Minimum application | ₹5,000 and in multiples of Re 1 thereafter. |
Exit load | Nil |
Exposure to large cap | Nil |
Exposure to mid cap | 100 percent |
Exposure to small cap | Nil |
The scheme is meant for investors who are looking to take exposure in the midcap segment while investing in relatively quality businesses that may generate economic value.
The scheme is also suitable for investors who are looking for a passive fund which brings disciplined approach to the portfolio construction, while adhering to the defined quality selection process.