Baroda BNP Paribas launches fund tracking Nifty Midcap 150: What to know

Baroda BNP Paribas Mutual Fund has launched an open ended fund that will track the performance of the Nifty Midcap 150 Total Return Index.

The Baroda BNP Paribas Mutual Fund NFO (new fund offer) opened for investment on Monday and will close on October 28, 2024. The fund’s investors may gain access to sectors such as capital goods, chemicals, real estate and textiles, which are either underrepresented or absent in the Nifty 50 Index, according to the company.

Nifty Midcap 150 Index Fund is the historically proven ability of its benchmark index, to deliver strong performance. An investment in the Nifty Midcap 150 TRI since April 2005 would have multiplied nearly 28 times at a compound annual growth rate of 18.7 per cent per annum.

 

“According to the S&P Indices vs Active Report, 75 per cent of mid/small-cap funds have underperformed their benchmarks over the last 10 years. Our NFO offers a low-cost, passive investment solution that aims to mirror the performance of the Nifty Midcap 150 Index, reducing the risk of underperformance and seeking to provide a better opportunity for growth,” said Suresh Soni, chief executive officer, Baroda BNP Paribas Asset Management India, highlighting the significance of the NFO.

Details about Baroda BNP Paribas Nifty Midcap 150 Index Fund

Objective of scheme: The investment objective of the scheme is to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty Midcap 150 Total Returns Index before expenses, subject to tracking errors, fees, and expenses. However, there is no assurance that the investment objective of the Scheme will be achieved.

Benchmark: The scheme will be benchmarked against the Nifty Midcap 150 Total Returns Index.

Fund allocation: The scheme will allocate 95-100 per cent to equity and equity-related securities of companies constituting the Nifty Midcap 150 Total Return Index, and 0-5 per cent to money market instruments, units of liquid schemes, and cash equivalents.

Minimum investment: The minimum investment amount is Rs 1,000, with subsequent investments in multiples of Re 1.

Plans and options: Regular and Direct plans with growth options are available.

Fund manager: The fund will be managed by Neeraj Saxena.

Exit load: An exit load of 0.2 per cent will apply if shares are redeemed on or before seven days from the date of allotment; the exit load will be nil if redeemed after seven days.

Who should invest?

Long-term investors looking for capital appreciation.

Investors seeking investments in equity and equity related securities replicating the composition of the Nifty Midcap 150 Total Return Index with an aim to achieve returns of the underlying index, subject to tracking error.