NFO alert: SBI Mutual Fund launches midcap and small-cap equity index funds. Who should invest? | The Financial Express

NFO alert: SBI Mutual Fund launches mid-cap and small-cap equity index funds. Should you invest?

SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund are open-ended schemes that would attempt to replicate the performance of underlying indices.

NFO alert: SBI Mutual Fund launches mid-cap and small-cap equity index funds. Should you invest?
SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund may be suitable for investors seeking long-term capital appreciation. Representational image/Pixabay

SBI Mutual Fund has launched two equity index funds – SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund. With these two funds, SBI MF has expanded its offerings in the passive investing segment. 

According to D P Singh, Deputy MD & Chief Business Officer, SBI Mutual Fund, Mid and Small-cap Index Funds provide a gateway to investors looking to tap into the growth potential of these emerging businesses as they move up the market capitalisation curve from being small caps to mid-caps and eventually large caps. (Also read: SBI launches 3 target maturity funds)

“Investors, especially first-time equity investors, can consider investing in these two funds in line with their risk profile for their long-term wealth creation goals,” Singh was quoted as saying in a statement from SBI MF. 

Here’s all you need to know about the new fund offers from SBI Mutual Fund:

Open-ended schemes

Both SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund are open-ended schemes that would attempt to replicate the performance of underlying indices – Nifty Midcap 150 Index and Nifty Smallcap 250 Index, respectively, SBI MF said in a statement. 

Also Read: Rs 5000/month SIP in this SBI Mutual Fund from 2012 would have given you Rs 29 lakh now! 

Investment objective

The new index funds from SBI MF aim to provide returns that closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.

Both these schemes would invest a minimum of 95% and a maximum of 100% of their assets in securities covered by the underlying indices – Nifty Midcap 150 Index and the Nifty Smallcap 250 Index respectively.

The funds will invest up to 5% in money market instruments like commercial papers, commercial bills, Treasury bills, triparty repo, Government securities having an unexpired maturity up to one year, call or notice money, certificates of deposit and usance bills.

Should you invest in SBI smallcap and midcap equity index funds?

SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund may be suitable for investors seeking long-term capital appreciation, through investments in securities covered by the Nifty Midcap 150 Index and the Nifty Smallcap 250 Index. The funds carry “very high risk”. You may invest in these funds basis your risk appetite and suggestion from a financial advisor.

Also Read: Retirement fund turns Rs 10,000/month to Rs 9 lakh in 5 years

Application amount and investment process

The minimum application amount required for SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund is is Rs. 5,000 and in multiples of Rs. 1 thereafter. You can invest in these funds through daily, weekly, monthly, quarterly, semi-annual, and annual SIP. 

Fund Manager

SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund would be managed by Harsh Sethi, who also manages other exchange-traded funds at SBI Mutual Fund.

NFO dates

The new fund offers will open on Wednesday (September 21, 2022) and close on Monday (September 26, 2022). 

Disclaimer: Mutual fund investments are subject to market risks. Investors should consult their financial advisers if in doubt about whether the product is suitable for them)

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