Jio BlackRock Mutual is creating a buzz by launching various schemes.
After the successful launch of three debt mutual fund schemes and raising Rs 178 billion (bn), the fund house has now secured the capital market regulator’s nod to launch five more new schemes.
These will be passively managed, namely…
- Jio BlackRock Nifty 50 Index Fund
- JioBlackRock Nifty Next 50 Index Fund
- JioBlackRock Nifty Midcap 150 Index Fund
- JioBlackRock Nifty Smallcap 250 Index Fund
- JioBlackRock Nifty 8-13 yr G-Sec Index Fund
Out of the five, four are equity funds and one is a debt fund. All these schemes will be offering only the direct plan and growth option, intending to keep the cost of investing low for investors.
Let’s understand the characteristics of these funds in detail…
1. Jio BlackRock Nifty 50 Index Fund
This is an open-ended equity fund replicating/tracking the Nifty 50 Index.
Under normal circumstances, the fund will allocate 95-100% of its assets in equity and equity-related securities of companies comprising the Nifty 50 Index, and up to 5% may be in debt & money market instruments.
Being passively managed, the investment objective is to replicate the composition of the Nifty 50 Index, subject to tracking errors. There is no assurance that the investment objective of the scheme will be achieved.
Currently, the top sectors of the Nifty 50 index are financial services (37.4%), IT (11.2%), oil and gas (10.4%), among others.
This index has heavyweight largecaps names such as HDFC Bank (13.2%), ICICI Bank (8.9%), Reliance Industries (8.8%), etc.
2. JioBlackRock Nifty Next 50 Index Fund
This open-ended equity fund would be replicating or tracking the Nifty Next 50 Index.
It will invest a predominant portion (95-100%) of its assets in equity and equity-related securities of companies comprising the Nifty Next 50 Index, and some (up to 5%) in debt & money market instruments.
The investment objective is to replicate the composition of the Nifty Next 50 Index, subject to tracking errors. The fund benchmarks its performance against the Nifty Next 50 Index.
The Nifty Next 50 Index represents 50 companies from the Nifty 100 after excluding the Nifty 50 companies. It has exposure to sectors such as financial services (20.9%), FMCG (10.4%), and power (8.6%), among others.
The top constituents of this index currently are InterGlobe Aviation (4.9%), Hindustan Aeronautics (3.8%), and Divis Lab (3.6%).
3. JioBlackRock Nifty Midcap 150 Index Fund
This open-ended equity fund will replicate/track the Nifty Midcap 150 Index. A predominant portion (95-100%) of the fund’s assets will be invested in equity and equity-related securities of companies comprising the Nifty Midcap 150 Index, and the remaining (up to 5%) in debt market instruments.
The fund will benchmark it performance against the Nifty Midcap 150 Index. The investment objective is replicating the composition of this index, subject to a tracking error.
The Nifty Midcap 150 Index represents 150 companies (companies ranked 101st to 250th) based on full market capitalisation from the Nifty 500 Index.
The Nifty Midcap 150 Index measure the performance of mid-market capitalisation companies. It currently has exposure to sectors such as financial services (23.8%), capital goods (14.4%), healthcare (11.3%), etc.
At present, the top companies in this index include names such as BSE (3.1%), Max Healthcare (2.6%), and Suzlon (2.2%), among others.
4. JioBlackRock Nifty Smallcap 250 Index Fund
This equity scheme will replicate/track the Nifty Smallcap 250 Index. A majority (95-100%) of the assets will be invested in equity and equity-related securities of companies comprising the Nifty Smallcap 250 Index.
The investment objective is to replicate the composition of the Nifty Smallcap 250 Index, subject to tracking errors. Thus, the benchmark of the scheme is the Nifty Smallcap 250 Index.
The Nifty Smallcap 250 Index represents 250 companies (companies ranked 251st to 500th) from the Nifty 500.
This index intends to measure the performance of small market capitalisation companies. It currently has exposure to sectors such as financial services (22.9%), capital goods (13.2%), and healthcare (12.5%), among others.
The top companies in the Nifty Smallcap 250 Index are MCX (2.3%), CDSL (1.6%), Laurus Labs (1.4%), etc.
5. JioBlackRock Nifty 8-13 yr G-Sec Index Fund
This is a passively managed debt scheme replicating/ tracking the Nifty 8-13 yr G-Sec Index, carrying relatively high-interest rate risk and relatively low credit risk.
Around 95% to 100% of the fund’s assets will be invested in securities comprising the Nifty 8-13 yr G-Sec Index and up to 5% in other debt & money market instruments.
The Nifty 8-13 yr G-Sec Index (against which the scheme benchmarks its performance) is constructed using the prices of the top 3 liquid Government of India bonds (in terms of traded value) with residual maturity between 8 to 13 years and have outstanding issuance exceeding Rs 50 bn.
In this index, the individual bonds are assigned weights considering the traded value and outstanding issuance in the ratio of 40:60. This index measures the changes in the prices of the bond basket.
The investment objective is to make passive investments in gilt securities replicating the composition of Nifty 8-13 yr G-Sec Index, subject to tracking errors. There is no assurance that the investment objective of the Scheme will be achieved.
Who Will Manage These Funds?
The equity-oriented index funds will be co-managed by Tanvi Kacheria, Anand Shah, and Haresh Mehta.
Whereas the JioBlackRock Nifty 8-13 yr G-Sec Index Fund will be managed by co-managed by Vikrant Mehta, Siddharth Deb, and Arun Ramachandran.
What is the Minimum Investment Amount?
For a lump sum investment, the minimum investment amount in all five index funds is Rs 500, and any amount thereafter.
In case of Systematic Investment Plan (SIP), the minimum investment amount is Rs 500 and in multiples of Re 1 thereafter.
Conclusion
Jio BlackRock Mutual Fund plans to introduce several equity and debt schemes by the year-end.
When adding mutual funds to your investment, pay consideration to your personal risk profile, broad investment objective, the financial goals you are addressing, and the time at hand to achieve those goals. This shall help you make an appropriate choice rather than getting carried away.
Invest sensibly and be thoughtful in your approach.
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