HDFC Asset Management Company Ltd has launched two additional ‘Smart Beta ETFs’ – HDFC NIFTY200 Momentum 30 ETF and HDFC NIFTY100 Low Volatility 30 ETF.
In a statement, HDFC AMC said Smart Beta investing involves stock selection and weighting based on factors, rather than size, as defined in the underlying index methodology by NSE Indices Limited (NIFTY 50). These investment strategies endeavour to provide better risk-adjusted returns than broad market cap-weighted indices.
The indices underlying the additional Smart Beta ETFs – HDFC NIFTY200 Momentum 30 ETF & HDFC NIFTY100 Low Volatility 30 ETF – have generated higher long-term returns than the NIFTY 200 TRI and the NIFTY 100 TRI, respectively. Both have generated higher average rolling returns over 1, 3, 5 and 10-year horizons compared to the NIFTY 200, 100 and 50 TRI.
Commenting on the launch, Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Co. Ltd. said, “Smart Beta investing is popular globally with AUM rising steadily. HDFC AMC is happy to expand index solution offerings for investors that are backed by empirical research. Smart Beta ETFs offer one-shot diversification of portfolios at a low cost and are proven tools for investors who seek returns over the long-term.”
The NFO period for the two Smart Beta ETFs is from September 26 to October 06. Investors may consider diversifying their investments across factors based on individual preferences, since the performance of various factors changes across different market environments. With a minimum investment of INR 500 per application and in multiples of Rs 1 thereafter, HDFC MF offers an opportunity for investors to invest in both Smart Beta ETFs.
Both schemes carry very high risks. Investors should consult their financial advisers, if in doubt about whether the product is suitable for them.
(Disclaimer: Mutual Fund investments are subject to market risks. There is no guarantee or assurance that a fund’s objective will be met.)