HDFC MF unveils BSE India Sector Leaders Index Fund: A low-cost route to India’s top stocks

HDFC Mutual Fund has announced the launch of the HDFC BSE India Sector Leaders Index Fund, an open-ended passive scheme that aims to replicate or track the performance of the BSE India Sector Leaders Index (TRI). The New Fund Offer (NFO) is open for subscription and will close on November 21.

This new fund gives investors an opportunity to gain exposure to India’s top-performing companies across key sectors, based on market capitalisation. The underlying index—the BSE India Sector Leaders Index—selects the top three companies by average six-month daily total market capitalisation from each sector represented in the BSE 500 Index.

By following this approach, the fund offers investors broad-based exposure across the economy while emphasizing sectoral leadership rather than just company size. It effectively blends the benefits of diversification with the reliability of investing in established market leaders.

The index currently covers over 20 major sectors, including financial services, IT, FMCG, automobiles, healthcare, telecom, construction, energy, and industrials. Such sectoral diversification helps reduce concentration risk, ensuring that investors are not overly dependent on the performance of a single industry. Instead, the portfolio captures growth opportunities across multiple high-performing segments of the Indian economy.

The HDFC BSE India Sector Leaders Index Fund will be managed by Nandita Menezes and Arun Agarwal. The minimum investment amount during the NFO period is Rs 100, with no upper limit. Once the NFO closes, the scheme will reopen for continuous subscription and redemption.

Being a passive index fund, it will not involve active stock picking. Instead, it will mirror the composition and performance of the BSE India Sector Leaders Index, with returns largely dependent on how the underlying companies and sectors perform, as well as on the fund’s ability to minimise tracking error. The expense ratio and detailed disclosures will follow SEBI regulations once the fund becomes operational.

The launch comes amid the growing popularity of passive investing in India, driven by lower costs, transparency, and diversification benefits. According to industry data, assets under management (AUM) in index funds and ETFs have more than doubled over the past three years, as both retail and institutional investors increasingly adopt cost-efficient exposure to equity markets through index-based strategies.

Peer comparison: Bandhan BSE India Sector Leaders Index Fund

The Bandhan BSE India Sector Leaders Index Fund (Regular Plan) is a newly launched open-ended equity index fund that tracks the BSE India Sector Leaders Index, offering exposure to leading companies across multiple sectors in the Indian economy. Launched in September 2025, the fund seeks to replicate the performance of the benchmark index with minimal tracking error.

Fund overview

Parameter    Details
Fund House    Bandhan Mutual Fund
Launch Date    September 2025
Category    Equity – Thematic / Index
Benchmark    BSE India Sector Leaders Index (BSE 500 TRI)
Fund Size (AUM)    Rs 34 crore
NAV (as of Nov 10, 2025)    Rs 10.03
Expense Ratio    0.19%
Exit Load    0.25% if redeemed within 15 days; Nil thereafter
Minimum Investment    Rs 1,000 (lump sum); Rs 100 (SIP)
Riskometer    Moderate to High
Fund Type    Passive (Index Fund)
Portfolio Snapshot
Parameter    Value / Details
Number of Stocks    62
Average Market Cap    Rs 3.11 lakh crore
Portfolio P/E Ratio    24.7
Portfolio P/B Ratio    3.76
3-Year Earnings Growth (Portfolio)    23.72%
Equity Allocation    100.3%
Top 5 Holdings (25.01%)    Bharti Airtel, Reliance Industries, HDFC Bank, Infosys, ICICI Bank
Top Sectors    Technology (18.07%), Consumer Discretionary (14.88%), Financials (13.39%), Materials (12.73%), Industrials (12.44%)

Performance and Outlook

Since launch, the NAV has moved slightly from Rs 10.00 to Rs 10.03, implying ~0.3% absolute return — too early for meaningful performance evaluation or XIRR comparison.

The Bandhan BSE India Sector Leaders Index Fund offers a low-cost, diversified entry into top-performing sector leaders across India’s largest industries. It’s best suited for investors seeking broad market exposure via a passive strategy, but it’s still a new and small-sized fund (Rs 34 crore) with a limited track record.