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	Regular Direct
Options	Growth
Fund Managers	Mr. Krishan Kumar Daga