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Nippon India Mutual Fund launched a new fund offer for a small-cap equity fund. The NFO for Nippon India Nifty Smallcap 250 Index Fund will open on September 28, 2020, and will close on October 9, 2020.

What is an index fund?

An index fund is a mutual fund that is designed to imitate a specific stock market index.

Investment Strategy

In this case, the stock market index that this mutual fund will imitate is Nifty Smallcap 250 index. It is an open-ended equity scheme that will replicate the Nifty Smallcap 250 index.

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Here is what the indicative asset allocation looks like:

InstrumentsIndicative Allocation (% of net assets)Risk Profile
MinimumMaximumHigh/Medium/Low
Securities constituting Nifty Smallcap 250 Index95100Medium to High
Money Market instruments or tri-part repo and / or reverse repo schemes which invest in  money market securities or liquid Schemes05Low to Medium

Benchmark

The scheme will benchmark its performance against Nifty Smallcap 250 TRI.  The index represents the companies ranked 251-500 from Nifty 500. Hence, the index aims to measure the performance of small market cap companies.

Fund Details

The scheme has both direct and regular plans. Under each of the plans, the scheme has growth and dividend option. The mutual fund scheme provides dividend payout and dividend reinvestment options under the dividend variant.

Here are other details of the fund:

Name of the FundNippon India Nifty Smallcap 250 Index Fund 
Type of SchemeAn open-ended index fund which intends to replicate/imitate the Nifty Smallcap 250 Index
BenchmarkNifty Smallcap 250 TRI
NFO DatesOpens on September 28, 2020, and closes on October 9, 2020
Fund ManagerMehul Sharma
Minimum Application Amount/Minimum Purchase Amount (including switches)Rs. 5,000 and in multiples of Re. 1 after that
Minimum Additional Investment (including switches)Rs 1,000 and in multiples of Re 1 after that
Minimum Redemption AmountRs 100 or any number of units
Entry LoadNil
Exit LoadNil
PlansRegular Plan and Direct Plan
OptionsGrowth and Dividend Option (Payout, Dividend Reinvestment Option)

SIP/SWP/STP

SIP
TypeMinimum AmountMinimum Installments
MonthlyRs. 100 and in multiples of Re. 1 60
MonthlyRs 500 and in multiples of Re. 1 12
MonthlyRs 1,000 and in multiples of Re. 1 6
QuarterlyRs 500 and in multiples of Re. 1 12
QuarterlyRs 1,500 and in multiples of Re. 1 4
YearlyRs 5,000 and in multiples of Re. 1 2

SWP

With the SWP facility, investors in this scheme can receive regular monthly/quarterly/half-yearly or yearly payments. The minimum amount which can be withdrawn is Rs.500 and in multiples of Rs. 100 after that.

STP

Fixed Transfer STP
TypeMinimum AmountDays
DailyMinimum of Rs. 100 and in multiples of Rs. 100 thereof Daily
WeeklyMinimum of Rs. 1,000 and in multiples of Rs 100 thereof STP will be executed on 1st, 8th, 15th and 22nd of every month
FortnightlyOn 1st and 15th of every month
MonthlyOn any pre-specified date of every month
QuarterlyMinimum of Rs. 3000 and in multiples of Rs 100 after On any pre-specified date of the first month of the quarter

There are other options apart from the fixed transfer plan under STP: capital appreciation STP and perpetual STP. You can refer to the scheme information document for more details.

Fund Manager

Mehul Sharma: Mr Sharma has over 14 years of experience as a fund manager and dealer of exchange-traded funds (ETFs) across different AMCs. 

Other schemes he manages are:

Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.

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