Nippon India Passive Flexicap FoF NFO
Nippon India Mutual Fund has announced the launch of Nippon India Passive Flexicap FoF (Fund of Funds). The scheme will be investing in units of Nippon India MF’s ETFs & Index funds across market capitalizations. As per the scheme documents, the fund will follow a multi cap allocation strategy for investing in ETFs & index funds, based on the average multi-cap category allocation as per the monthly data provided by CRISIL.
The New Fund Offer (NFO) starts from 10th December 2020 and will end on 24th December 2020.
The investment objective of the scheme is to provide long term capital appreciation by investing in units of ETFs(Exchange Traded Funds) & index funds offered by Nippon India Mutual Fund.
Why Nippon India Passive Flexicap FoF?
Some of the reasons to invest in this fund are:
- The fund provides an opportunity to invest in stocks across market capitalizations.
- The fund aims to capture the market wisdom by simply investing in ETF/Index funds & the wisdom of fund managers in the industry by following the asset allocation of multi cap funds across market capitalizations.
- Aims to eliminate the biases of a fund manager towards picking stocks in sectors & across market caps along with the allocation strategy.
- The performance across market capitalizations can significantly differ from each other as observed from the past. An allocation towards different market caps can help to generate better returns with lower volatility over the long term.
- It has been observed that broader markets have outperformed during bull markets. The returns from Nifty 500 have been higher than Nifty 50 during previous bull markets.
- The Fund aims to invest at least 95% of its assets in units of Nippon India’s ETFs & index funds.
- The fund will be investing in index funds & ETFs across the market capitalization i.e large, midcap & smallcap index/ETFs as per the average allocation of multi cap category in the industry as per CRISIL data.
- The rebalancing of the fund will be done every month.
- As the fund will also invest in index funds tracking particular indices, they will be qualified for other than equity taxation. The following taxation will be applicable:
- If units of the fund are held for less than 3 years, then gains on investment will be treated as Short Term Capital Gains which is taxable as per the slab rate of an investor.
- If units of the fund are held for more than 3 years, then gains on investment will be treated as Long Term Capital Gains which are taxable at the rate of 20% after indexation benefits.
Who Should Invest?
This scheme is suitable for investors who are -
- Interested in long term capital growth.
- Interested in making investments in units of ETFs & index funds offered by Nippon India Mutual Fund.
- Recommended for investors with a moderate to high-risk appetite.
Asset Allocation Pattern-
|Instruments||Minimum % of total assets (Indicative)||Maximum % of total assets (Indicative)||Risk Profile|
|Units of Nippon India ETFs & index funds Nippon India MF||95||100||Moderate to High|
|Debt and money market instruments||0||5||Low to Moderate|
About the scheme-
|Name of the fund||Nippon India Passive Flexicap FoF|
|Fund launched by||Nippon India Mutual Fund|
|Asset Management Company||Nippon Life India Asset Management Limited|
|Type of scheme||An open-ended fund of funds scheme investing in units of Nippon India MF’s ETFs & index funds.|
|Investment Objective||The investment objective of the scheme is to generate long term capital appreciation through investments in units of ETFs & index funds of Nippon India Mutual Fund.|
|Benchmark||Nifty 500 TRI|
|NFO Period||10 December to 24 December 2020|
|Entry Load||Not Applicable|
|Minimum Application Amount||₹ 5,000 & in multiple of ₹ 1 thereafter|
|Minimum Additional Amount||₹ 1,000 & in multiple of ₹ 1 thereafter|
|STP,DTP & SWP||Available|
|Fund Managers||Mr. Mehul Dama|
|Type||Minimum Installments||Minimum Amount|
|Monthly SIP||60||₹ 100 & in multiples of ₹ 1 thereafter|
|12||₹ 500 & in multiples of ₹ 1 thereafter|
|6||₹ 1,000 & in multiples of ₹ 1 thereafter|
|Quarterly SIP||12||₹ 500 & in multiples of ₹ 1 thereafter|
|4||₹ 1,500 & in multiples of ₹ 1 thereafter|
|Yearly SIP||2||₹ 5,000 & in multiples of ₹ 500 thereafter|