Baroda BNP Paribas Launches Nifty Midcap 150 Index Fund
The Baroda BNP Paribas Mutual Fund has launched the Baroda BNP Paribas Nifty Midcap 150 Index Fund, which is an open-ended scheme targeting the Nifty Midcap 150 Total Returns Index for replication or tracking. This new fund offer is available for subscription at present and will remain so till October 28, 2024. After the NFO closing date, the scheme will reopen for continuous sale and repurchase within five business days from the date of allotment.
This is a passively managed, cost-effective equity fund providing diversified exposure to midcap stocks with high growth potential. The fund house states that the sectoral diversity of the portfolio would be greater than that of the NSE Nifty 50 Index, which will thus make the sectoral concentration risks less pronounced.
This fund aims to replicate the Nifty Midcap 150 Total Returns Index, which is a mid-cap companies’ index carrying an opportunity to be groomed into large-cap companies. Therefore, investors in this scheme will get exposure to sectors such as capital goods, chemicals, real estate, and textiles, which either remain underrepresented or miss from the Nifty 50 Index altogether.
On S&P Indices vs Active Report, the fund house said that almost 75% of its mid- and small-cap funds lag their respective benchmarks over the last decade. NFO offers a low-cost passive investment option that closely replicates Nifty Midcap 150 Index performance; it affords investors an opportunity to potentially minimize underperformance risks while upgrading growth prospects.
It shall be benchmarked against the Nifty Midcap 150 Total Returns Index and managed by Neeraj Saxena. This one has an exit load of 0.2% in case redemptions are made on or before seven working days from the date of allotment. No exit load is applicable thereafter.
The minimum amount to start an investment in this fund is Rs.1,000, and further investments must be made in multiple of Re 1. The corpus of the fund shall be invested 95-100% in equity and equity-related securities of companies eligible for inclusion in Nifty Midcap 150 Total Returns Index and the balance of up to 5 per cent in money market instruments, liquid schemes, and cash equivalents.
The funds are suitable for long-term capital growth since the investments are made into equity and equity-related securities, whose objective is to track the Nifty Midcap 150 Index. In terms of tracking error, an amount equivalent to the return of the index would be expected.
