HDFC Asset Management, investment manager to HDFC Mutual Fund (HDFC MF) has announced the launch of its two funds – HDFC NIFTY Next 50 ETF and HDFC NIFTY 100 ETF, in order to expand their suite of “HDFC MF Index Solutions”, which HDFC Mutual Fund has been managing for the past 20 years.
HDFC NIFTY Next 50 ETF and HDFC NIFTY 100 ETF funds offer a way to gain exposure to the Indian large cap space. The NFOs open today July 25, 2022, and close on August 1, 2022.
The benchmark of HDFC NIFTY Next 50 ETF is NIFTY Next 50 Total Returns Index (TRI) and offers diversification benefits at the stock and sector level while providing potential for higher risk-adjusted returns vs NIFTY 50 in the long term.
The benchmark of HDFC NIFTY 100 ETF – NIFTY 100 TRI offers a simple way to gain exposure to the Indian large cap space by focusing on the top 100 companies based on full market capitalization, thus giving better market representation.
It provides more balanced diversification than the NIFTY 50 Index while tracking the behaviour of the combined portfolio of NIFTY 50 and NIFTY Next 50 Indices.
The objective of the funds is to provide investment returns that, before expenses, closely correspond to the total returns of the securities as represented by the NIFTY Next 50 Index and NIFTY 100 Index, subject to tracking errors, respectively. Both the funds will be managed passively, with investments in securities covered by the underlying index.
Recently, two index funds of HDFC MF – NIFTY 50 and S&P BSE SENSEX Index funds – completed 20 years of existence since their inception on July 17, 2002. Index funds are a type of mutual fund which track an underlying index. These funds are easily accessible by investors since they do not need a Demat account to invest in such funds.
Unlike mutual funds, the exchange-traded fund (ETF) units are traded on the stock exchange during trading hours. So, one can buy and sell ETF units the way one buys stocks anytime when the exchanges are open. Anyone with a Demat account with any brokerage house can trade in ETFs. ETFs are essentially a basket-buy of all the stocks represented in an index or a theme.