NFO: Nippon India Passive Flexicap FOF

By Morningstar |  11-12-20 | 

Nippon Life AMC has launched Nippon India Passive Flexicap fund of fund which will predominantly invest in units of ETFs/index funds of Nippon India Mutual Fund.

The fund will be benchmarked with Nifty 500 TRI. The new fund offer opens on December 10, 2020, and closes on December 24, 2020. The minimum investment required is Rs 5,000.

Different parts of the market – large cap, mid cap and small cap – perform at various points in time. It is difficult to predict which part of the markets would outperform. Hence, staying invested across market caps may help generate potentially better returns over the long run.

Nippon India Passive Flexicap FOF would invest across market caps, basis average allocation of all active multicap funds in the industry into large, mid and small cap stocks. By doing so, the fund aims to capture market wisdom along with industry wisdom and endeavors to eliminate individual fund manager biases towards market cap allocation and sector/stock selection.

The investment objective of the scheme is to seek long term capital growth by investing in units of ETFs/index funds of Nippon India Mutual Fund. The scheme follows a passive investment strategy and will predominantly invest in the following units of ETFs/index funds of Nippon India Mutual Fund:

  1. Large Cap ETF/ Index Fund
  2. Mid Cap ETF/ Index Fund
  3. Small Cap ETF/ Index Fund

The underlying stocks of the above ETFs/index funds are mutually exclusive. Hence, the fund would have investments in 500 stocks. However, the actual allocation to the above funds would be based on the mutual fund industry’s multi cap category allocation towards the different market caps. Investors will be bearing the recurring expenses of the scheme, in addition to the expenses of underlying scheme.

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