NFO Alert: HDFC Mutual Fund launches HDFC NIFTY200 Momentum 30 Index Fund; all you need to know

HDFC Mutual Fund announced the launch of the HDFC NIFTY200 Momentum 30 Index Fund, an open-ended scheme replicating/tracking the NIFTY200 Momentum 30 Index (TRI).

The scheme opened for public subscription on February 09, 2024, and will close on February 23, 2024. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended scheme replicating/tracking the Nifty 200 Momentum 30 Index. This product is suitable for investors seeking

• Returns that are commensurate (before fees and expenses) with the performance of the NIFTY200 Momentum 30 Index (TRI) over the long term, subject to tracking error.
• Investment in equity securities covered by the NIFTY200 Momentum 30 Index.

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate returns that are commensurate (before fees and expenses) with the performance of the NIFTY200 Momentum 30 Index TRI (Underlying Index), subject to tracking error. There is no assurance that the investment objective of the scheme will be realised

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹100 per plan/option and in multiples of Re 1. There is no upper limit for investment.

The asset allocation under the scheme, under normal circumstances, will be as follows:

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such momentum-based index funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

How will the scheme benchmark its performance?

The performance of the scheme is benchmarked against the Nifty200 Momentum 30 Index (TRI). The index has been chosen as the benchmark since the scheme will invest in stocks that are constituents of the NIFTY200 Momentum 30 Index. Thus, the composition of the aforesaid benchmark is such that it is most suited for comparing the performance of the scheme.

The Trustee reserves the right to change the benchmark for the performance of the scheme in conformity with the investment objectives and appropriateness of the benchmark subject to SEBI (MF) Regulations, and other prevailing guidelines, if any by suitable notification to the investors to this effect.

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”.

Who will manage this scheme?

Nirman Morakhia and Arun Agarwal will be the fund managers for the scheme.

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. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.