Nippon Life India Asset Management Limited (NAM India) (formerly known as Reliance Nippon Life Asset Management Limited), asset manager of Nippon India Mutual Fund (NIMF), has announced the launch of Nippon India Passive Flexicap FoF (An Open-ended Fund of Funds Scheme investing in units of ETFs/Index Funds of Nippon India Mutual Fund).
Nippon India Passive Flexicap FoF will predominantly invest in units of ETFs/Index Funds of Nippon India Mutual Fund. The fund will be benchmarked with Nifty 500 TRI. The NFO opens on 10th December 2020 and closes on 24th December 2020. The minimum investment required is Rs 5,000 and in multiples of Re 1 thereafter.
Different parts of the market – Large Cap, Mid Cap and Small Cap – perform at various points in time. It is difficult to predict which part of the markets would outperform. Hence, staying invested across market caps may help generate potentially better returns over the long run.
Nippon India Passive Flexicap FoF would invest across market caps, basis average allocation of all active Multicap Funds in the industry into large, mid and small cap stocks as provided by CRISIL every month. By doing so, the fund aims to capture market wisdom along with industry wisdom and endeavors to eliminate individual Fund Manager biases towards market cap allocation and Sector / Stock selection.
The investment objective of the scheme is to seek long term capital growth by investing in units of ETFs / Index Funds of Nippon India Mutual Fund. The Scheme follows a passive investment strategy and will predominantly invest in the following units of ETFs / Index Funds of Nippon India Mutual Fund:
- Large Cap ETF/ Index Fund
- Mid Cap ETF/ Index Fund
- Small Cap ETF/ Index Fund
The underlying stocks of the above ETFs / Index Funds are mutually exclusive. Hence, the fund would have investments in 500 stocks. However, the actual allocation to the above funds would be based on the Mutual Fund industry’s Multi Cap category allocation towards the different market caps. Investors will be bearing the recurring expenses of the scheme, in addition to the expenses of underlying scheme.
Speaking on the launch, Saugata Chatterjee, Co-Chief Business Officer, Nippon India Mutual Fund said, “We are pleased to introduce this unique offering. As a firm, we are committed to bringing differentiated investment strategies for our investors. This fund would help investors participate in all parts of the markets by aggregating the market and industry wisdom at a low cost.
