Groww Mutual Fund files Draft Document with SEBI for New ETF Fund
Groww Mutual Fund has filed a draft proposal with SEBI to launch the open-ended growth fund called Groww Nifty 500 Momentum 50 ETF, tracked to mirror the returns of the Nifty 500 Momentum 50 Index Total Return Index (TRI). This will be an ETF that tracks securities in the Nifty 500 Momentum 50 Index for long-term capital appreciation.
The prime objective of the fund is to generate returns, before expenses, closely tracking the total return of the Nifty 500 Momentum 50 Index, accounting for tracking errors. The scheme will be benchmarked against the Nifty 500 Momentum 50 Index TRI and will be managed by fund manager Abhishek Jain.
It thus provides a low entry threshold with a minimum amount of Rs.500 and further increments of Re 1. There would also be no exit load, it is an essential feature for those interested in flexibility. Units will be issued in full figures, and any residual funds below the amount required will be refunded to the investor.
The fund, in terms of asset allocation, shall invest 95-100% in the securities of the Nifty 500 Momentum 50 Index and up to 5% in money market instruments, debt security, and units of domestic mutual funds’ debt or liquid schemes. The fund is passively managed wherein investment will continue to remain the same weighted proportion in index stocks as in the case of the Nifty 500 Momentum 50 Index.
The concern of the fund manager therefore would be to keep the tracking error as low as possible, an effort to recover the changes in index composition by rebalancing the portfolio from time to time. Adjustments also take into account the cash flow fluctuations arising out of either investment by new investors or redemptions. Regulation 52(6)(b) caps the TER at 1%.
Groww Nifty 500 Momentum 50 ETF is an open-end fund with a long-term capital appreciation focus and equity investment opportunity, followed by the Nifty 500 Momentum 50 Index.
The idea is to provide equity-related instruments, focusing solely on momentum-driven stocks.
In addition to the ETF, Groww Mutual Fund has also submitted a draft proposal for a Fund of Funds (FOF) scheme, called Groww Nifty 500 Momentum 50 ETF FOF. This open-ended fund will invest directly in units of the Groww Nifty 500 Momentum 50 ETF, providing investors with an alternative route to access the same investment strategy.
This dual offering further underscores Groww’s commitment to delivering innovative, index-based investment options for those seeking to capture growth in the momentum-focused equity segments.
