NFO alert: Nifty Midcap 50 Index Fund, Groww Mutual Fund's two offers launched this week

NFOs this week: Kotak Mahindra Asset Management Company Limited has launched the Kotak Nifty Midcap 50 Index Fund. It is an open-ended scheme designed to replicate or track the Nifty Midcap 50 Index. The new fund offer (NFO) opened for subscription on July 25 and will close on August 8.

The main investment objective is to deliver returns that closely match the total returns of the underlying index, before expenses, while accounting for tracking errors.

The Nifty Midcap 50 Index includes the top 50 midcap stocks selected from the Nifty Midcap 150 Index based on their full market capitalisation, with a preference for companies that are tradable in NSE’s Future & Options segment.

By incorporating leading midcap stocks from diverse sectors within the Nifty Midcap 150 Index, the fund delivers a focused representation of the midcap segment.

Features of Kotak Nifty Midcap 50 Index Fund

The investment strategy of this fund is focused on offering investors a detailed insight into the midcap sector of the stock market. It achieves this by diversifying across 15 different sectors, thus providing a broad representation of the various sectors within the market. The fund specifically includes the top 50 companies chosen from the Nifty Midcap 150 Index.

Moreover, the fund favours equities in the Future & Options (F&O) segment, primarily to increase liquidity and improve tradability. To ensure that the fund stays in tune with the latest market conditions, the index is periodically rebalanced every six months.

Nilesh Shah, managing director of Kotak Mahindra AMC, said: “While Midcap 50 Index presents a mixed landscape with varying opportunities across sectors, this index fund allows investors to gain focused exposure to a select group of top midcap companies within Nifty Midcap 150 Index.”

Groww MF's two NFOs

Groww Mutual Fund also launched two New Fund Offerings (NFOs) for the Groww Nifty EV & New Age Automotive ETF and the Groww Nifty EV & New Age Automotive ETF FOF.

The NFO for the Groww Nifty EV & New Age Automotive ETF will be available until August 2, 2024, while the Groww Nifty EV & New Age Automotive ETF FOF will be open from July 24 to August 7, 2024.

The development of the Electric Vehicle (EV) sector is the pet project of the NDA government. The Electric Mobility Promotion Scheme 2024, initiated on April 1 and set to conclude on July 31, 2024, has earmarked Rs 500 crore to accelerate the uptake of electric two-wheelers and three-wheelers. Complementarily, the government targets achieving a 30% share of electric vehicles in the overall vehicle population by the year 2030, envisioning annual electric vehicle sales crossing the 16 million mark. Notably, an allocation of approximately ₹18,000 crores has been designated to bolster the production capacity of electric vehicle batteries.

Features

Both funds will track the Nifty EV & New Age Automotive Index - TRI, which reflects the performance of companies in the electric vehicle (EV) sector or those involved in developing new-age automotive technologies.
The index monitors around 33 companies from the Nifty 500 index engaged in EV manufacturing, hybrid and hydrogen fuel vehicles, charging infrastructure, and battery production.

The Nifty EV & New Age Automotive Index aims to provide investors with exposure to the growing electric vehicle industry and new-age automotive technologies. It specifically focuses on companies that are driving innovation in EV manufacturing, hybrid and hydrogen fuel vehicles, charging infrastructure, and battery production. By tracking this index, investors can gain insights into the performance and trends within this dynamic sector.

Varun Gupta, CEO of Groww Asset Management Ltd, stated, "With the rapid growth in the electric vehicle sector, these new funds aim to offer investors opportunities to benefit from this dynamic and evolving industry. Our ETF and FOF are designed to help investors capitalize on the future of electric mobility and related technologies, providing exposure to a diverse portfolio of companies driving innovation in the EV ecosystem."