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.
In this article
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.
Here is what the indicative asset allocation looks like:
| Instruments | Indicative Allocation (% of net assets) | Risk Profile | |
| Minimum | Maximum | High/Medium/Low | |
| Securities constituting Nifty Smallcap 250 Index | 95 | 100 | Medium to High |
| Money Market instruments or tri-part repo and / or reverse repo schemes which invest in money market securities or liquid Schemes | 0 | 5 | Low 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 Fund | Nippon India Nifty Smallcap 250 Index Fund |
| Type of Scheme | An open-ended index fund which intends to replicate/imitate the Nifty Smallcap 250 Index |
| Benchmark | Nifty Smallcap 250 TRI |
| NFO Dates | Opens on September 28, 2020, and closes on October 9, 2020 |
| Fund Manager | Mehul 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 Amount | Rs 100 or any number of units |
| Entry Load | Nil |
| Exit Load | Nil |
| Plans | Regular Plan and Direct Plan |
| Options | Growth and Dividend Option (Payout, Dividend Reinvestment Option) |
SIP/SWP/STP
| SIP | ||
| Type | Minimum Amount | Minimum Installments |
| Monthly | Rs. 100 and in multiples of Re. 1 | 60 |
| Monthly | Rs 500 and in multiples of Re. 1 | 12 |
| Monthly | Rs 1,000 and in multiples of Re. 1 | 6 |
| Quarterly | Rs 500 and in multiples of Re. 1 | 12 |
| Quarterly | Rs 1,500 and in multiples of Re. 1 | 4 |
| Yearly | Rs 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 | ||
| Type | Minimum Amount | Days |
| Daily | Minimum of Rs. 100 and in multiples of Rs. 100 thereof | Daily |
| Weekly | Minimum of Rs. 1,000 and in multiples of Rs 100 thereof | STP will be executed on 1st, 8th, 15th and 22nd of every month |
| Fortnightly | On 1st and 15th of every month | |
| Monthly | On any pre-specified date of every month | |
| Quarterly | Minimum 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:
- Nippon India ETF Consumption
- Nippon India ETF Dividend Opportunities
- Nippon India ETF Gold BeES
- Nippon India ETF Infra BeES
- Nippon India ETF Nifty 100
- Nippon India ETF PSU Bank BeES
- Nippon India ETF Sensex
- Nippon India ETF Shariah BeES
- Nippon India Index Fund – Sensex Plan
- Nippon India Index Fund – Nifty Plan
- Nippon India Gold Savings Fund
- Nippon India ETF Nifty Smallcap 250
- Nippon India ETF NV20
- Nippon India Junior BeES FoF
- Nippon India ETF Sensex Next 50
- Nippon India ETF Nifty IT
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.
I write on mutual funds and stocks. My passion for jamming numbers, following money and stock markets drove me to simplify complex financial concepts for you.
