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
| Stock | NIFTY 50 Equal Weight Index | NIFTY 50 Index |
| Reliance Industries | 2.0% | 10.0% |
| HDFC Bank | 2.0% | 9.6% |
| Infosys | 2.0% | 7.6% |
| HDFC | 2.0% | 6.5% |
| ICICI Bank | 2.0% | 6.4% |
| Total | 10.0% | 41.2% |
*As of 30th June 2021
Sector Allocation: NIFTY 50 Index vs NIFTY 50 Equal Weight Index
| Sector | NIFTY 50 Equal Weight Index | NIFTY 50 Index |
| Financial Services | 21.8% | 37.2% |
| Consumer goods | 14.1% | 11.1% |
| Automobile | 11.9% | 5.3% |
| IT | 10.1% | 17.4% |
| Pharma | 8.2% | 3.6% |
| Metal | 8.0% | 3.6% |
| Oil & Gas | 8.0% | 11.7% |
| Cement & Cement Products | 5.9% | 2.5% |
| Power | 4.1% | 1.7% |
| Services | 2.0% | 0.8% |
| Fertilizers & Pesticides | 2.0% | 0.6% |
| Construction | 2.0% | 2.7% |
| Telecom | 2.0% | 1.8% |
*As of 30th June 2021
Valuations: NIFTY 50 Index Vs NIFTY 50 Equal Weight Index
| Index | P/B Ratio | P/E Ratio | Dividend Yield |
| NIFTY 50 Index | 4.24 | 28.33 | 1.26% |
| NIFTY 50 Equal Weight Index | 3.81 | 24.11 | 1.6% |
*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
| Instruments | Minimum % of total assets (Indicative) | Maximum % of total assets (Indicative) | Risk Profile |
| Equity securities representing NIFTY 50 Equal Weight Index | 95% | 100% | Moderate to High |
| Debt and Money market instruments | 0% | 5% | Low to Moderate |
About the Scheme
| Name of the fund | HDFC NIFTY 50 Equal Weight Index Fund |
| Fund launched by | HDFC Mutual Fund |
| Asset Management Company | HDFC AMC Limited |
| Type of scheme | An open-ended equity scheme replicating or tracking NIFTY 50 Equal Weight Index |
| Investment Objective | The 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. |
| Benchmark | NIFTY 50 Equal Weight TRI |
| Entry Load | Not Applicable |
| Exit Load | NIL |
| 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 |
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| Options |
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| Fund Managers | Mr. Krishan Kumar Daga |