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Groww MF launches India’s first non-cyclical index fund: Should you invest?
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The new fund offer (NFO) of the scheme will be available for subscription till May 16.
Groww Mutual Fund (MF) on Thursday (May 2) launched the Nifty Non-Cyclical Consumer Index Fund. This marks the inception of India’s first non-cyclical index fund. The scheme is aimed at securing long-term capital appreciation through strategic investments in equity and equity-related instruments.
The new fund offer (NFO) of the scheme will be available for subscription till May 16.
Fund details
Managed by Abhishek Jain, a professional with nearly 12 years of experience in equity markets, the Groww Nifty Non-Cyclical Consumer Index Fund seeks to emulate the performance of the Nifty Non-Cyclical Consumer Index.
The core strategy involves maintaining identical weightage to the index constituents, with the objective of mirroring its total return.
The benchmark of the scheme is set as the Nifty Non-Cyclical Consumer Index – TRI.
Minimum investment
The fund offers a minimum lump sum investment of ₹500, with subsequent increments in multiples of ₹1.
For investors opting for Systematic Investment Plans (SIP), the minimum investment stands at ₹1,200.
Load details
The fund imposes an exit load of 1% if units are redeemed or switched out within 30 days from the date of allotment, according to the mutual fund house.
However, no exit load is applicable beyond this initial 30-day period.
Certain exemptions apply to units allotted on reinvestment of Income Distribution cum Capital Withdrawal, while systematic transactions adhere to prevailing exit loads.
Investment strategy
The fund’s underlying investment strategy entails allocating between 95% to 100% of its assets to equities and equity-related securities, with a minor allocation of 0% to 5% in debt and money market instruments, units of debt schemes, and debt ETFs.
Sector breakup of the index tracked by the scheme
| Sector | Weight |
| Fast Moving Consumer Goods | 42.49% |
| Consumer Services | 20.71% |
| Consumer Durables | 20.37% |
| Telecommunication | 12.15% |
| Services | 2.38% |
| Textiles | 1.11% |
| Media, Entertainment & Publication | 0.78% |
(Source: Groww)
Investor considerations
According to Groww Mutual Fund, investors with long-term horizons and a preference for equity and equity-associated securities should invest in Groww Nifty Non-Cyclical Consumer Index Fund.
However, prudent decision-making should always be based on individual financial goals, coupled with professional consultation when necessary.
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