India-based asset management company HDFC Mutual Fund has launched the HDFC Nifty500 Multicap 50:25:25 Index Fund. This new fund offer (NFO) will be based on the Nifty500 Multicap 50:25:25 Total Returns Index and gives the investors a chance to have exposure to large, mid, and small-cap stocks.
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HDFC Nifty500 Multicap 50:25:25 Index Fund: Introduction
The HDFC Nifty500 Multicap 50:25:25 Index Fund is essentially passive since it imitates the pedigree of a particular index. Its target is to mimic the outcomes of the Nifty500 Multicap 50:25:25 Total Returns Index. The NFO for this scheme has started from 06-08-2024 and it shall remain open till 20-08-2024.
Currently, we have arranged the fund to provide investment across the Nifty 500 index, 50% of the total fund is invested in large-cap stocks while the remaining 25% is in the mid-cap and 25% is in small-cap stocks. This mutual ratio offers the investors the stability of large capitalized or established companies while at the same time giving the expansion of mid and small-capitalized companies.
Key features and Investment funds strategy
The HDFC Nifty500 Multicap 50:25:25 Index Fund is suitable for long-term wealth creation plans in the equities market. The fund facilitates investment across different market capitalizations; thus, it has the prospect of registering massive gains in the event of market volatility especially in a bullish market.
- Minimum Investment: Potential investors can invest with as low as Rs 100 hence a large number of investors can invest in this fund particularly those who are new to investment.
- Benchmark: The fund is set against the Nifty500 Multicap 50:25:25 Index to means that the fund performance is in line with a well-developed index available in the market.
- Risk Factor: What needs to be brought to attention is the fact that though the principal investment in this scheme has loads of benefits, it carries a risk described as “very high” in the fund’s riskometer. Therefore, this is right for those investors who are willing to take a higher amount of risk and the investment is for long-term.
Who Should Consider Investing?
The HDFC Nifty500 Multicap 50:25:25 Index Fund can be considered appropriate for the following investors: This fund is much appropriate to those investors who look forward to investing in equity securities ranging through various large, mid as well as small capitalization companies.
Such investors who have conviction in the India growth story and who would like to be involved in the equity market with some sort of differential gearing factor might be interested in this fund. The 50:25:25 concept is still the deliberate attempt to achieve market diversity because as we saw with the earlier approach, market segments are uneven, and equal exposure may result in more volatility.
Why HDFC Nifty500 Multicap 50:25:25 Index Fund?
Navneet Munot, Managing Director & Chief Executive Officer of HDFC Mutual Fund, highlighted the role of the fund as one that would allow investors to access the growth process in India in a balanced manner. He explained that the domination by large caps means stability while diversification by mid and small cap means investors get to invest in the growth of these emerging companies.
Over two decades of excellence in index solutions are something that HDFC Mutual Fund values a lot. The introduction of this fund contributes to this mission of becoming a wealth creator for every Indian due to its provision of a remarkable array of investment products.
Final Thoughts: Whether you should invest depends on a range of factors such as this type of investment
So, for those who want a portfolio diversification exposure in Nifty 500 Companies with equal market cap range investing in HDFC Nifty500 Multicap 50:25:25 Index Fund may create a good opportunity. However, this, like all equity investments, raises the appropriate risks for your personality and your investing timeframe. Thus, it can be implied that the fund has a “very high” risk and hence cannot be recommended for conservative investors.
Thus, the HDFC Nifty500 Multicap 50:25:25 Index Fund is a balanced investment opportunity suitable for anyone wanting to obtain a stake in India’s future development in various sectors. Nonetheless, given that the entry point is quite low, the fund is divided into well-diversified segments, and the company providing the fund HDFC Mutual Fund is a good investment opportunity with high risk for those willing to get higher returns proportions.
