Bandhan Mutual Fund (formerly IDFC Mutual Fund) announced the launch of Bandhan Nifty Alpha 50 Index Fund, an open-ended scheme tracking the Nifty Alpha 50 index.
The scheme opened for public subscription on October 25, 2023, and will close on November 06, 2023. The scheme re-opens for ongoing subscription and redemption within five business days from the date of allotment of units.
What kind of mutual fund scheme is this?
This is an open-ended scheme tracking the Nifty Alpha 50 index. This product is suitable for investors seeking
- To create wealth over a long term
- Investment in equity and equity-related instruments belonging to the Nifty Alpha 50 index.
Highlighting the key reasons to consider the Nifty Alpha 50 index strategy, Vishal Kapoor, CEO, Bandhan AMC, said, “Traditional passive funds are designed to mimic their benchmark and thus offer broad market-based returns. Bandhan Nifty Alpha 50 Index Fund aims to generate outperformance by selecting stocks with specific factors that produce potentially higher risk-adjusted returns compared to the market. NSE data, as of September 30, 2023, indicate that the Nifty Alpha 50 Index has outperformed the Nifty 50 Index and the Nifty 500 Index, generating an alpha of ~5% over these broad-based indices, albeit with higher volatility. Savvy Investors seeking to add an aggressive strategy to their portfolio could include Bandhan Nifty Alpha 50 Index Fund, to enhance the growth potential of the portfolio.”
What is the main objective of investing in this fund?
The investment objective of the scheme is to replicate the Nifty Alpha 50 index by investing in securities of the Nifty Alpha 50 index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of Nifty Alpha 50 index, subject to tracking errors. However, there is no assurance or guarantee that the objectives of the scheme will be realised and the scheme does not assure or guarantee any returns.
How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹1000 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments |
Indicative allocations (% of total assets) |
Risk Profile | |
|
Minimum |
Maximum |
||
|
Securities belonging to the Nifty Alpha 50 Index |
95% |
100% |
Very High |
|
Debt & Money Market instruments |
0% |
5% |
Low to Moderate |
Are there similar mutual funds in the market?
To date, no other asset management company (AMC) has launched any such fund in India.
How will the scheme benchmark its performance?
The scheme shall be benchmarked to the Nifty Alpha 50 TRI. Since the scheme is an index fund, the compositions of the benchmark are such that it is most suited for comparing the performance of the mutual fund scheme.
Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be “Nil”.
Who will manage this scheme?
Nemish Sheth has been chosen as the dedicated fund manager of the scheme.
Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
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Updated: 25 Oct 2023, 06:35 PM IST