 "Groww MF gets approval for Nifty Non-Cyclical Consumer Index Fund")
Groww Mutual Fund on Wednesday announced that it has obtained approval from the market regulator, Sebi, to introduce the Nifty Non-Cyclical Consumer Index Fund through a New Fund Offering (NFO).
This would be the country’s first Non-Cyclical Index fund and the NFO is expected to go live in the first week of May, the company said in a statement.
It will be an open-ended scheme tracking the Nifty Non-Cyclical Consumer Index-TRI (Total Return Index).
The aim of the fund is to generate long-term capital growth by investing in securities of the Nifty Non-Cyclical Consumer Index (TRI) in the same proportion to offer returns.
It is structured to allocate between 95-100 per cent of its assets in equities and equity-related securities of companies directly involved in or anticipated to gain from consumption and consumption-related endeavours.
Additionally, it may invest 0-5 per cent in debt and money market instruments, as well as units of debt schemes or debt ETFs.
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What is non-cyclical index fund
The Nifty Non-Cyclical Consumer Index Fund is a type of mutual fund that aims to generate long-term capital growth by investing in securities of the Nifty Non-Cyclical Consumer Index. This index contains 30 companies that are not majorly impacted by economic instability and are in regular demand, making them a good investment option during economic downturns.
Non-cyclical stocks are also known as defensive stocks, these stocks outperform their industry in the stock market despite economic instability. They are not affected by cyclical changes and are in constant demand due to the everyday needs of consumers, such as food, water, and other utilities.
This investment scheme is tailored for investors aiming for long-term capital growth and interested in allocating funds to equity and equity-related instruments within the Nifty Non-Cyclical Consumer Index. The principal amount invested in the scheme carries a “very high” risk classification according to the scheme's riskometer.