A fresh option for diversification: SBI Mutual Fund launches SBI Nifty 500 Index Fund

A fresh option for diversification: SBI Mutual Fund launches SBI Nifty 500 Index Fund

Vardan Pandhare
/ Categories: Trending, Mindshare, Mutual Fund

New fund offer (NFO) opens on Tuesday, September 17, 2024, and closes on Tuesday, September 24, 2024

SBI Mutual Fund, India’s largest fund house has launched the SBI Nifty 500 Index Fund. It is an open-ended scheme replicating/tracking the Nifty 500 Index, as a part of its passive offering.

 

The New Fund Offer (NFO) period for the scheme is September 17 – 24, 2024.

 

What is the investment objective?
The investment objective of the scheme is to provide returns that correspond to the total returns of the securities as represented by the underlying index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.

 

Investment strategy
The scheme would primarily invest a minimum of 95 per cent and a maximum of 100 per cent of its assets in stocks comprising the Nifty 500 Index and up to 5 per cent in Government securities (like G-Secs, SDLs, treasury bills and any other like instruments as specified by the RBI from time to time), including triparty repo and units of liquid mutual fund.

 

The minimum application amount required is Rs 5,000 and in multiples of Re 1 thereafter. Investments can also be done through daily, weekly, monthly, quarterly, semi-annual, and annual SIP (Systematic Investment Plan).

 

Fund Manager
The fund manager for SBI Nifty 500 Index Fund would be Viral Chhadva who has been associated with the fund house since December 2020 and currently manages SBI Nifty50 Equal Weight Index Fund and SBI Nifty50 Equal Weight ETF.

 

Management comments
D P Singh, Deputy MD & Joint CEO, SBI Funds Management Limited, said, "The SBI Nifty 500 Index Fund is an opportunity for those who want to invest in one fund encompassing established (large caps), growing (Mid-Caps) and young (small cap) businesses. What you get in effect is a proxy to the country’s listed universe of companies, spanning various sectors and a multicap-based offering in one index fund."

 

Who should invest in this scheme?
Investors seeking long-term capital appreciation and diversification may consider passive funds, as these provide exposure to the entire stock market through a single investment.

 

It’s important to note that this option is best suited for those with a high to very high-risk tolerance. If you're new to equity investments, consider starting with a modest amount to gain experience with the associated risks and rewards. Gradually increase your investment as you become more comfortable and align it with your risk profile and financial objectives.

 

Disclaimer: The article is for informational purposes only and not investment advice.

 

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