HDFC Asset Management Company has floated two more smart Beta ETFs -- HDFC NIFTY 200 Momentum 30 ETF and HDFC NIFTY 100 Low Volatility 30 ETF for its investors in this festive season. Earlier this month, the AMC launched Nifty100 Quality 30 ETF, Nifty50 Value 20 ETF, and Nifty Growth Sectors 15 ETF in order to expand its suite of HDFC MF Index Solutions.
Smart Beta investing is basically stock selection and weighting based on factors, such as risk-adjusted returns, rather than size, as defined in the underlying index methodology by NSE Indices Limited (NIFTY 50). These investment strategies are introduced to offer better risk-adjusted returns than broad market cap-weighted indices.
The new Smart Beta ETFs, HDFC NIFTY200 Momentum 30 ETF and HDFC NIFTY100 Low Volatility 30 ETF, have generated higher long-term returns than the NIFTY 200 TRI and the NIFTY 100 TRI, respectively, claims the company. Both have generated higher average rolling returns over 1, 3, 5, and 10-year horizons compared to the NIFTY 200, 100, and 50 TRI.
Talking about the benefits, Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Company, said: “Smart Beta ETFs offer one-shot diversification of portfolio at a low cost, and is a proven tool for investors who seek returns over the long-term.”
The NFO period for the two schemes is from September 26 to October 6. Investors can consider diversifying their investments based on their preferences, since the performance of various factors changes across different market environments. The minimum investment for the schemes is Rs 500 per application and in multiples of INR 1 thereafter.
Under HDFC NIFTY200 Momentum 30 ETF, a maximum of 30 stocks will be chosen from NIFTY 200, which has a listing history of more than one year. The metrics which is used to define this factor (quality 30) return on equity, debt/equity ratio (D/E), and 5-year EPS growth variability (EGV). The ETFs portfolio will be reviewed on a regular basis to take a stock of its performance.
Under HDFC NIFTY 100 Low Volatility 30 ETF, a maximum of 30 stocks will be chosen from NIFTY q00, which has a listing history of more than one year. The ETFs portfolio will be reviewed on a regular basis to take a stock of its performance.
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