On Friday, March 7, HDFC Mutual Fund introduced the HDFC Nifty Top 20 Equal Weight Index Fund. This open-ended index fund aims to track the Nifty Top 20 Equal Weight Index TRI.
The fund is now open for subscription, and investors can invest in it until March 21, 2025. After the NFO closes, the fund will reopen for sale and repurchase within 5 working days from the date of unit allocation.
Investment Details and Minimum Requirement
Investors can start investing in this new fund with just ₹100, and there is no lock-in period or exit load. The fund can be purchased in any amount after the initial investment.
The fund managers are Nirman S Morakhia and Arun Agarwal. The benchmark for this fund is the Nifty Top 20 Equal Weight TRI. Please note that the risk level for this scheme is very high.
Where Will the Fund Invest?
As per the Scheme Information Document (SID), the fund will invest between 95% and 100% in securities related to the Nifty Top 20 Equal Weight Index TRI.
A small portion, between 0% and 5%, will be allocated to debt securities, including money market instruments and units of debt mutual funds.
Investment Strategy of the Fund
This fund follows a passive investment strategy, meaning it aims to mirror the performance of the Nifty Top 20 Equal Weight Index TRI.
To minimize tracking error, the fund will regularly rebalance its portfolio, considering changes in the index’s stock weightages
and new investments or redemptions. A portion of the fund will also be invested in debt and money market instruments to ensure liquidity.
Who Should Consider Investing in This Fund?
This fund is suitable for investors who want to earn returns similar to the Nifty Top 20 Equal Weight Index TRI over the long term.
However, the performance will be subject to tracking error. It is also ideal for investors looking to invest in equity stocks that are part of the Nifty Top 20 Equal Weight Index TRI.
