Publish Date:
HDFC Mutual Fund has launched HDFC Nifty500 Multicap 50:25:25 Index Fund
It is open-ended equity scheme replicating/tracking Nifty500 Multicap 50:25:25 Index.
The investment objective of the scheme is to generate returns that are commensurate (before fees and expenses) with the performance of the Nifty500 Multicap 50:25:25 Index, subject to tracking error. There is no assurance that the investment objective of the Scheme will be achieved.
The current uncertainty in the economic environment has increased volatility in Indian equity markets which makes it challenging for the investors. In such volatile periods, index funds can offer stability thanks to their diversified nature. By tracking an index, they are less susceptible to the extreme fluctuations that can impact individual stocks or actively managed funds.
Under normal circumstances, HDFC Nifty500 Multicap 50:25:25 Index Fund will hold an allocation of 95% to 100% in Securities covered by Nifty500 Multicap 50:25:25 Index and 0% to 5% in Debt Securities & Money Market Instruments, Units of Debt Schemes of Mutual Funds.
[Read: Best Multi Cap Funds for 2024 - Top Performing Multi Cap Mutual Funds in India]
HDFC Nifty500 Multicap 50:25:25 Index Fund will be managed passively with investments in stocks comprising the Underlying Index subject to tracking error.
The investment strategy would revolve around reducing the tracking error to the least possible through regular rebalancing of the portfolio, taking into account the change in weights of stocks in the Index as well as the incremental collections/redemptions in the Scheme. A part of the funds may be invested in debt and money market instruments, to meet liquidity requirements.
Allocation to large-mid-small cap is reset to 50:25:25 every quarter. By investing in the top 500 stocks, the fund offers broad exposure to the Indian equity market, reducing the impact of individual stock volatility. he fund's allocation strategy balances growth potential with stability, making it a suitable option for growth-oriented investors.
In the dynamic landscape of investing, the pursuit of a balanced and diversified portfolio remains a cornerstone strategy for many investors. The HDFC Nifty 500 Multicap 50:25:25 Index Fund emerges as a compelling option for those seeking a well-rounded approach to equity investment.
Passive management involves fewer transactions and lower management fees compared to actively managed funds. This translates to lower expense ratios, maximizing net returns for investors.
HDFC Nifty500 Multicap 50:25:25 Index Fund is benchmarked against the Nifty500 Multicap 50:25:25 Index.
HDFC Nifty500 Multicap 50:25:25 Index Fund will be managed by Mr Nirman Morakhia and Mr Arun Agarwal.
HDFC Nifty500 Multicap 50:25:25 Index Fund is open for subscription from August 06, 2024 to August 20, 2024. The fund will reopen for continuous sale and repurchase within 5 business days.
The fund offers Direct Plan and Regular Plan. Under each plan the fund offers Growth option only.
The minimum subscription amount is Rs 100/- and in multiples of Re. 1 thereafter.
The HDFC Nifty 500 Multicap 50:25:25 Index Fund is well-suited for long-term investors seeking to build wealth over time.