The markets are today flooded with new fund offers. Any asset management company, also known as an AMC, that is looking to introduce a new mutual fund to the market can do so by announcing a new fund offer (NFO). An NFO is a way for the company to raise capital from investors who are interested in participating in the new fund. This process allows investors to subscribe to the fund during the initial offering period. Investors have the opportunity to acquire units of a mutual fund at the subscription price, typically set at Rs 10 per unit, through these offers.
Here's a list of new fund offers that opened this week:
SBI Nifty 500 Index Fund
SBI Mutual Fund has recently introduced a New Fund Offer (NFO) for its latest product, the SBI Nifty 500 Index Fund. This fund offers investors a distinctive opportunity to access the full range of the Indian equity market with a single investment. As an open-ended scheme designed to replicate the Nifty 500 Index, it is included in SBI Mutual Fund's passive investment options. The Nifty 500 Index captures about 92.1% of the total market capitalization of listed companies on the NSE, providing a comprehensive overview of the Indian stock market dynamics.
Top points for the fund
1. The NFO is currently open for subscription from September 17 to September 24, 2024. 2. “The investment objective of the scheme is to provide returns that 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,” SBI Mutual Fund stated. 3. The primary investment strategy of the scheme would involve allocating at least 95% and up to 100% of its assets in stocks that make up the Nifty 500 Index. 4. Additionally, up to 5% of the assets would be invested in Government securities such as G-Secs, SDLs, treasury bills, and other instruments specified by the RBI. This may also include triparty repo agreements and units of liquid mutual funds. 5. Investors are required to make a minimum application amount of Rs 5,000, with additional investments possible in increments of Re 1. Furthermore, investors have the option to invest through various SIP modes, including daily, weekly, monthly, quarterly, semi-annual, and annual plans. 6. The fund manager overseeing the SBI Nifty 500 Index Fund is Viral Chhadva, who has been with the fund house since December 2020. In addition to managing this scheme, he also currently oversees the SBI Nifty50 Equal Weight Index Fund and the SBI Nifty50 Equal Weight ETF
Shamsher Singh, MD & CEO, SBI Funds Management Limited, said: “The SBI Nifty 500 Index Fund offers investors the opportunity to invest in companies across the entire Indian economy, encompassing over 92% of the total market cap of all listed companies. Investors who seek exposure to not only established large cap companies but also mid and small caps, passively and at a relatively lower cost can consider investing in this fund.”
D P Singh, Deputy MD & Joint CEO, SBI Funds Management Limited, stated: “The SBI Nifty 500 Index Fund is an opportunity for those who want to invest in one fund encompassing established (large caps), growing (mid-caps) and young (small cap) businesses. What you get in effect is a proxy to the country’s listed universe of companies, spanning various sectors and a multicap-based offering in one index fund.”
Kotak NIFTY Midcap 150 Momentum 50 Index
The most recent New Fund Offer (NFO) from Kotak Mahindra Asset Management Company is the Kotak NIFTY Midcap 150 Momentum 50 Index Fund. This open-ended scheme aims to mirror the performance of the NIFTY Midcap 150 Momentum 50 Index, providing investors with a chance to concentrate on midcap stocks displaying recent upward price movements.
Top points
1. The scheme opened for public subscription on September 19 and will close on October 3, 2024. 2. The scheme will reopen for ongoing transactions: October 11, 2024. 3. Investors are advised to acknowledge that there is a considerable level of risk associated with their invested capital, as indicated by the risk-o-meter assessment. 4. The designated benchmark for this investment option is the Nifty Midcap 150 Momentum 50 Index (Total Return Index - TRI). This specific product is tailored for investors with the following goals:
> Pursuing long-term capital growth. > Striving to achieve returns in alignment with the Nifty Midcap 150 Momentum 50 Index, accounting for potential tracking variations. 5. The scheme will be managed by a team comprising Devender Singhal, Satish Dondapati, and Abhishek Bisen. 6. The NIFTY Midcap 150 Momentum 50 Index is made up of the highest-performing 50 midcap companies from the Nifty Midcap 150 Index. These companies are chosen based on their momentum scores, which follow a strategy of investing in stocks that have demonstrated positive price trends over the previous 6 and 12 months. This method offers investors a structured approach to investing in companies that are experiencing significant upward movement.
Devender Singhal, Executive Vice President & Fund Manager at Kotak Mahindra AMC, said: "The NIFTY Midcap 150 Momentum 50 Index has historically outperformed other midcap indices. By focusing on momentum stocks, this fund offers investors a way to potentially benefit from price trends in a passive and disciplined manner."