NFO Update: UTI Mutual Fund Introduces Two New Index Funds
UTI Mutual Fund has launched two new index funds – the UTI Nifty India Manufacturing Index Fund and the UTI Nifty Midsmallcap 400 Momentum Quality 100 Index Fund. Both funds is now open for subscription under their NFO, from January 28 until February 10.
The UTI Nifty India Manufacturing Index Fund will be benchmarked against the Nifty India Manufacturing Total Return Index (TRI), while the UTI Nifty Midsmallcap 400 Momentum Quality 100 Index Fund will be benchmarked against the Nifty Midsmallcap 400 Momentum Quality 100 TRI. Both schemes will be passively managed and will mirror the performance of their respective indexes, subject to tracking error.
The UTI Nifty India Manufacturing Index Fund is the right bet for investors who aim for long-term returns. It aligns with the Nifty India Manufacturing Index. The scheme would aim to replicate the total return of the securities represented by this underlying index, without any tracking error. The scheme will mainly allocate its assets in equity and equity-related securities to the companies constituting the Nifty India Manufacturing Index, amounting to 95-100%. Furthermore, it can invest up to 5% of its assets in debt and money market instruments, including triparty repo on government securities, treasury bills, or liquid mutual funds.
UTI Nifty Midsmallcap 400 Momentum Quality 100 Index Fund provides returns, whether in the form of income, capital appreciation, or through a combination of both, on a long-term basis that is matched with the performance of the Nifty Midsmallcap 400 Momentum Quality 100 Index. This fund will be primarily invested 95-100% in equity and equity-related instruments of the companies that make a part of Nifty Midsmallcap 400 Momentum Quality 100 Index. A small share of 0-5% will be in the form of investments in debt and money market instruments.
Both funds are suitable for investors looking for diversified exposure to the manufacturing sector and the mid and small-cap segment. They are ideal for those who want to benefit from the growth potential of these specific market segments while maintaining a passive investment approach.
The minimum initial investment for both funds is Rs.1,000. Subsequent investments will be permitted in multiples of Re 1. For SIPs, the minimum investment would be Rs.500 for daily, weekly, and monthly SIPs, and subsequently, the amounts also in multiples of Re 1. For quarterly SIPs, the minimum investment will be Rs.1,500, in multiples of Re 1.
The two funds, which will be managed by Sharwan Kumar Goyal and Ayush Jain respectively, will both be tracking a precise version of their associated indexes while tracking error is attempted to be decreased by rebalancing them regularly. Strategies for managing the two would thus be strictly replicating or replicating more closely the trends in the particular underlying indexes whenever necessary, stock weights change and on inflowing or outlying stocks.
Both UTI Nifty India Manufacturing and UTI Nifty Midsmallcap 400 Momentum Quality 100 Index Funds provide investors with a hassle-free and efficient way to gain exposure to these specific market indices while maintaining a low-cost, long-term investment strategy.
