Navi Mutual Fund has introduced a new fund offering (NFO) – the Navi Nifty 500 Multicap 50:25:25 Index Fund. This unique fund aims to provide investors with diversified exposure across large, mid, and small-cap segments of the Indian stock market by mirroring the Nifty 500 Multicap 50:25:25 Index.
- Fund Name: Navi Nifty 500 Multicap 50:25:25 Index Fund
- NFO Period: July 18, 2024 to July 30, 2024
- Benchmark Index: Nifty 500 Multicap
- Minimum Investment: ₹500 (lump sum)
The primary objective of the Navi Nifty 500 Multicap 50:25:25 Index Fund is to generate returns that closely correspond to the total returns of the Nifty 500 Multicap 50:25:25 Index, subject to tracking errors. This mutual fund investment is designed to provide balanced exposure across large-cap, mid-cap, and small-cap stocks.
The Nifty 500 Multicap 50:25:25 Index is structured to reflect the performance of large-cap, mid-cap, and small-cap segments of the Indian market with a specified allocation of 50% to large-cap stocks, 25% to mid-cap stocks, and 25% to small-cap stocks. This allocation ensures a balanced representation of different market capitalizations, aiming for optimal diversification.
The fund will follow a passive investment strategy, aiming to replicate the composition and performance of the Nifty 500 Multicap 50:25:25 Index. This involves investing in the same stocks and in similar proportions as the index.
- Equity and Equity-Related Instruments: 95-100%
- Debt and Money Market Instruments: 0-5%
The Navi Nifty 500 Multicap 50:25:25 Index Fund is suitable for:
- Investors seeking diversified exposure across large, mid, and small-cap segments.
- Those looking for long-term capital appreciation with a balanced risk profile.
- Investors who prefer passive investment strategies with low expense ratios.
1. Balanced Exposure: The fund provides a well-diversified portfolio across different market capitalisations, reducing the impact of sector-specific risks.
2. Cost Efficiency: As a passive fund, it generally has lower expense ratios compared to actively managed funds.
3. Broad Market Representation: Exposure to 500 companies ensures representation of a wide array of sectors and industries.
1. Market Risk: Investments in equities are subject to market volatility and fluctuations.
2. Tracking Error: There could be slight deviations between the fund’s performance and the benchmark index.
3. Sector-Specific Risk: While diversified, individual sectors within the index can experience downturns.
The Navi Nifty 500 Multicap 50:25:25 Index Fund offers an attractive investment opportunity for those seeking balanced exposure across the Indian stock market's large, mid, and small-cap segments. By replicating the Nifty 500 Multicap 50:25:25 Index, the fund aims to deliver consistent returns while managing risk through diversification. As always, investors should consider their risk tolerance and investment objectives before investing.
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