Mutual Fund News : UTI Mutual Fund Introduces UTI Nifty Midcap 150 Quality 50 Index Fund

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UTI Mutual Fund has launched a new scheme – UTI Nifty Midcap 150 Quality 50 Index Fund.

It is open-ended scheme replicating/tracking Nifty Midcap 150 Quality 50 Total Return Index (TRI).

The investment objective of the scheme is to provide returns that, before expenses, closely correspond to the total returns 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.

UTI Nifty Midcap 150 Quality 50 Index Fund is mandated to invest 95% to 100% of its total assets in Equity & Equity related securities covered by the Nifty Midcap 150 Quality 50 Index. The scheme may also hold 0% to 5% of its assets in Debt and Money Market Instruments, including Triparty Repo on Government Securities or treasury bill and units of Liquid Mutual Fund.

As per the Scheme Information Document, Nifty Midcap 150 Quality 50 Index Fund is a low-cost index Fund which tracks the Nifty Midcap150 Quality 50 Index passively. The scheme endeavours to achieve return equivalent to underlying index while minimizing tracking error.

The scheme shall endeavour to maintain the same weightage they represent in the index or investing in derivatives on the said index. The Scheme may take an exposure to equity derivatives of constituents of the underlying index for short duration when securities of the index are unavailable, insufficient or for rebalancing at the time of change in index or in case of corporate actions or for hedging purposes, as permitted subject to rebalancing within 7 days.

The performance of UTI Nifty Midcap 150 Quality 50 Index Fund may not be commensurate with the performance of the respective benchmark of the Scheme on any given day or over any given period. Such variations are commonly referred to as the tracking error. The Scheme intends to maintain a low tracking error by actively managing the portfolio in line with the index. However, there is no assurance that all such buying and selling activities would necessarily result in benefit for the scheme. A small portion of the net assets will be held as cash or will be invested in debt and money market instruments permitted by SEBI/RBI including TREPS or in alternative investment for the TREPS as may be provided by the RBI, to meet the liquidity requirements under the Scheme.

The scheme is a passively managed fund and therefore the portfolio turnover will be confined only to rebalancing of the portfolio on account of new subscriptions, redemptions and changes in composition of the underlying index.

UTI Nifty Midcap 150 Quality 50 Index Fund’s performance will be benchmarked against Nifty Midcap 150 Quality 50 Index TRI (Total Return Index).

The fund will be managed by Mr Sharwan Kumar Goyal.

The NFO opens for subscription on March 28, 2022, and closes on April 05, 2022. The scheme will reopen for continuous sale and repurchase from April 13, 2022.

The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.

The fund offers Regular Plan and Direct Plan having a Growth Option.