HDFC Mutual Fund has launched the HDFC Nifty500 Multicap 50:25:25 Index Fund, a new fund offering (NFO) aimed at providing investors with diversified exposure across large-cap, mid-cap, and small-cap stocks. This fund is designed to replicate the Nifty500 Multicap 50:25:25 Index, offering balanced growth potential across different market capitalisations.
- Fund Name: HDFC Nifty500 Multicap 50:25:25 Index Fund
- NFO Period: August 6 to August 20, 2024
- Benchmark Index: Nifty500 Multicap 50:25:25 Index
- Minimum Investment: ₹5,000 (lump sum)
The primary objective of the HDFC Nifty500 Multicap 50:25:25 Index Fund is to generate returns that closely correspond to the total returns of the Nifty500 Multicap 50:25:25 Index, subject to tracking errors. The index includes a balanced allocation of large-cap, mid-cap, and small-cap stocks in the ratio of 50:25:25, respectively.
HDFC Nifty500 Multicap 50:25:25 Index Fund follows a passive mutual fund investment strategy, aiming to replicate the composition and performance of the Nifty500 Multicap 50:25:25 Index. Key aspects of the strategy include:
1. Stock Selection: Investing in the same stocks that constitute the Nifty500 Multicap 50:25:25 Index.
2. Proportional Allocation: Maintaining a portfolio that mirrors the weightage of the index constituents.
3. Cost Efficiency: Keeping the expense ratio low due to the passive nature of the fund.
- Large-Cap Stocks: 50%
- Mid-Cap Stocks: 25%
- Small-Cap Stocks: 25%
The HDFC Nifty500 Multicap 50:25:25 Index Fund is suitable for:
- Investors seeking diversified exposure across large-cap, mid-cap, and small-cap stocks.
- Those looking for long-term capital appreciation with balanced risk.
- Investors with a moderate to high-risk tolerance and a long-term investment horizon.
1. Diversified Exposure: Offers balanced exposure across different market capitalisations, reducing the risk associated with any single segment.
2. Growth Potential: Provides opportunities for capital appreciation through investments in large, mid, and small-cap stocks.
3. Cost Efficiency: As a passively managed fund, it typically has lower expense ratios compared to actively managed funds.
1. Market Risk: Investments in equities are subject to market fluctuations and economic conditions.
2. Tracking Error: Slight deviations between the fund’s performance and the benchmark index due to tracking errors.
3. Volatility: Exposure to mid-cap and small-cap stocks may lead to higher volatility compared to a pure large-cap fund.
The HDFC Nifty500 Multicap 50:25:25 Index Fund NFO provides an attractive opportunity for investors to gain diversified exposure across large-cap, mid-cap, and small-cap stocks. With a focus on balanced growth and cost efficiency, this fund aims to deliver consistent returns while managing risk through diversification. As always, investors should consider their risk tolerance and investment objectives before investing.
For android only