By Nesil Staney
JioBlackRock Asset Management on Wednesday received approvals from the Securities and Exchange Board of India (Sebi) to launch five funds, including four passive index funds and a debt-oriented product. JioBlackRock is a 50:50 joint venture between Reliance Industries-owned Jio Financial and US-based mutual funds giant BlackRock.
The funds that received approval are: JioBlackRock Nifty 50 Index Fund, JioBlackRock Nifty 8-13 yr G-Sec Index Fund, JioBlackRock Nifty Smallcap 250 Index Fund, JioBlackRock Nifty Next 50 Index Fund and JioBlackRock Nifty Midcap 150 Index Fund. The minimum investment amount in each of these funds is Rs 500.
These products are low-cost, and aimed at mass-market investors, said fund managers. While the Nifty Midcap 150 Index Fund provides exposure to mid-sized companies by replicating the Nifty Midcap 150, the Next 50 Index Fund tracks companies ranked 51–100 by market capitalisation, just outside the Nifty 50, for large-cap diversification.
BlackRock’s entry in the Indian market has led to concerns that market shares of dominant players could change, according to Avinash Satwalekar, president, Franklin Templeton (India). He believes that passive schemes will gradually become popular in India. While there is limited potential to generate alpha for large-cap active funds, there are opportunities in mid- and small-cap segments, he points out.
The Nifty Smallcap 250 Index Fund of small-cap stocks has higher growth potential along with greater risk. The JioBlackRock Nifty 8–13 yr G-Sec Index Fund is a debt-oriented product investing in government securities for conservative investors seeking lower risk. These funds represent the joint venture’s intent to disrupt the domestic mutual fund industry by leveraging Jio’s digital ecosystem and BlackRock’s global asset management expertise.
The funds offer zero exit load and the initial subscription will be through the new fund offer (NFO) window as per Sebi norms, with each offer remaining open for 3-15 days. These are direct plans only, which mean investors can transact directly through digital platforms like MyJio or Jio Finance bypassing intermediaries, which helps keep expense ratios low.