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HDFC NIFTY 50 Equal Weight Index Fund NFO - Objective, Feature, Stock Allocation & Valuation

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Gaurav Seth
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HDFC NIFTY 50 Equal Weight Index Fund NFO

HDFC Mutual Fund has announced the launch of the HDFC NIFTY 50 Equal Weight Index Fund. The fund is an open-ended equity scheme that will be replicating or tracking the NIFTY 50 Equal Weight Index.

The New Fund Offer (NFO) starts on 04th August 2021 and will end on 13th August 2021. 

Investment Objective 

The scheme’s investment objective is to provide long-term capital growth by generating returns closely corresponding to the returns of the securities constituting the NIFTY 50 Equal Weight Index.

Features

  • The Fund will be investing at least 95% of its assets in securities constituting the NIFTY 50 Equal Weight Index.
  • The fund offers exposure to all the 50 constituents of the NIFTY 50 Index with equal weight.
  • Lower expense ratio as compared to other active funds.

What is the Nifty 50 Equal Weight Index?

  • The index gives exposure to the top 50 companies in terms of market capitalization.
  • All the constituents of the index are equal weight i.e. of 2%.
  • With equal weightage, the index gives equal opportunity to the constituents to impact the index with their growth and return potential.
  • The index offers smart and intelligent investing through ‘Auto Quarterly Rebalancing’ and enables ‘Auto Profit Booking’.

Stock Allocation: NIFTY 50 Index Vs NIFTY 50 Equal Weight Index

StockNIFTY 50 Equal Weight IndexNIFTY 50 Index
Reliance Industries2.0%10.0%
HDFC Bank2.0%9.6%
Infosys2.0%7.6%
HDFC2.0%6.5%
ICICI Bank2.0%6.4%
Total10.0%41.2%

*As of 30th June 2021

Sector Allocation: NIFTY 50 Index vs NIFTY 50 Equal Weight Index

SectorNIFTY 50 Equal Weight Index NIFTY 50 Index
Financial Services21.8%37.2%
Consumer goods14.1%11.1%
Automobile11.9%5.3%
IT10.1%17.4%
Pharma8.2%3.6%
Metal8.0%3.6%
Oil & Gas8.0%11.7%
Cement & Cement Products5.9%2.5%
Power4.1%1.7%
Services2.0%0.8%
Fertilizers & Pesticides2.0%0.6%
Construction2.0%2.7%
Telecom2.0%1.8%

*As of 30th June 2021

Valuations: NIFTY 50 Index Vs NIFTY 50 Equal Weight Index

IndexP/B RatioP/E RatioDividend Yield
NIFTY 50 Index4.2428.331.26%
NIFTY 50 Equal Weight Index3.8124.111.6%

*As of 30th June 2021

Why invest in HDFC NIFTY 50 Equal Weight Index Fund?

  • HDFC NIFTY 50 Equal Weight Index Fund gives exposure to the top 50 large-cap high growth potential companies listed on NSE along with the equal weightage.
  • Equal weightage aims to reduce the sectoral and stock concentration risk.
  • Equal Weightage gives equal opportunity to all the stocks to participate in the journey of the index.

Who Should Invest?

This scheme is suitable for investors who are -

  • Interested in long-term capital growth.
  • Interested in earning returns that closely correspond to the NIFTY 50 Equal Weight Index returns, subject to tracking errors.
  • Recommended for investors with an investment horizon of 3-5 years & above.

Asset Allocation Pattern

InstrumentsMinimum % of total assets (Indicative)Maximum % of total assets (Indicative)Risk Profile
Equity securities representing NIFTY 50 Equal Weight Index95%100%Moderate to High
Debt and Money market instruments0%5%Low to Moderate

About the Scheme

Name of the fundHDFC NIFTY 50 Equal Weight Index Fund
Fund launched byHDFC Mutual Fund 
Asset Management CompanyHDFC AMC Limited 
Type of schemeAn open-ended equity scheme replicating or tracking NIFTY 50 Equal Weight Index
Investment ObjectiveThe investment objective of the scheme is to provide long-term capital growth to investors by generating returns closely corresponding to the total returns of securities representing the NIFTY 50 Equal Weight Index.
BenchmarkNIFTY 50 Equal Weight TRI
Entry LoadNot Applicable
Exit LoadNIL
Taxation

Taxed as Equity

-If units are redeemed within 12 months, gains are taxed as short term capital gain tax @15%

-If units are sold after 12 months, gains are taxed as long term capital gain tax @10% on the gains exceeding ₹ 1 lakh in a financial year

Minimum Application Amount ₹ 5,000 & in multiple of ₹ 1 thereafter
Minimum Additional Amount₹ 1,000 & in multiple of ₹ 1 thereafter
Plans Available
  • Regular
  • Direct
Options
  • Growth
Fund ManagersMr. Krishan Kumar Daga

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