Aditya Birla Sun Life Mutual Fund (ABSLMF) has launched two new index funds - Aditya Birla Sun Life Nifty Midcap 150 Index Fund and Aditya Birla Sun Life Nifty Smallcap 50 Index Fund.
To ride the opportunities in Midcap and Smallcap segments of the market, the fund house has launched these open ended schemes. Aditya Birla Sun Life Nifty Midcap 150 Index Fund tracks Nifty Midcap 150 TR Index, while Aditya Birla Sun Life Nifty Smallcap 50 Index Fund tracks Nifty Smallcap 50 TR Index. The NFOs of both the funds open on March 15, 2021, and close on March 26, 2021.
Commenting on the new index funds, Mr. A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC Limited said, “Indian economy is at an inflection point and the country is witnessing a sharp economic recovery as evident in most high frequency data points. During periods of economic recovery the market becomes more broad based and makes it a favourable period for mid and small caps to outperform. Additionally, the cyclical recovery we are witnessing also sets a stage for mid and small caps to do well as they have higher exposure to the domestic economy. While the macro economic factors seem to be in place, Government’s reinvigorated push to Manufacturing and Infra growth through policies like Make in India; Aatmanirbhar Bharat; PLI Scheme etc. is further strengthening the case for domestic oriented Midcap & SmallCap companies to do well”.
Index funds follow the rule of natural selection - typically companies that do well stay in the index while others drop out. Typically, Midcap and Smallcap Indices are represented by more number of sectors as compared to the large cap counterparts, with higher weightages to the future ready sectors like Consumer, IT, Pharma, Construction, Industrial Manufacturing etc. Also they provide exposure to stocks operating in high growth and sunrise sectors which can flourish in a high growth developing economy like India.
“The two new index funds by us provides an opportunity to investors to participate in the broader market opportunities. For investors, who are seeking allocation to higher-growth Midcap and Small cap segments, index funds in mid and small cap spaces can provide a lower-risk alternative with the advantage of lower cost”, added Mr. Balasubramanian.
The minimum application amount for these funds is Rs. 500/-, and in multiples of Re. 1/- thereafter, during the New Fund Offer period. The new fund offer period of the two index funds is till March 26, 2021. (Share Manthan, March 17, 2021)
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