UTI Mutual Fund has unveiled two new index funds: the UTI Nifty200 Quality 30 Index Fund and the UTI Nifty Private Bank Index Fund. These new offerings provide investors with opportunities to target specific sectors and investment styles within the Indian equity market, leveraging UTI’s extensive experience in managing index funds to deliver cost-effective investment solutions.
UTI Nifty200 Quality 30 Index Fund
The UTI Nifty200 Quality 30 Index Fund aims to track the Nifty200 Quality 30 Total Return Index (TRI). This fund is designed to offer exposure to 30 high-quality companies renowned for their robust financial metrics and stable balance sheets. Notably, this fund is the first of its kind in the market, focusing on companies with strong and consistent earnings.
Key Features:
NFO Period: September 2, 2024, to September 16, 2024
Fund Manager: Mr. Sharwan Kumar Goyal, Head – Passive, Arbitrage & Quant Strategies, UTI AMC
Benchmark: Nifty200 Quality 30 TRI (Based on Index Composition as of July 31, 2024)
Minimum Investment: Initial investment of Rs 5,000 and in multiples of Rs 1 thereafter. Subsequent investments under a folio can be Rs 1,000 and in multiples of Rs 1 thereafter, with no upper limit.
Plans & Options: Available in Regular and Direct Plans, both offering only the Growth Option.
Load Structure: No entry load; exit load is also nil.
Investment Rationale: The fund provides an opportunity for investors to benefit from a potential style rotation in the market, particularly as the quality investment style has been out of favor in recent years.
UTI Nifty Private Bank Index Fund
The UTI Nifty Private Bank Index Fund, another market-first offering, focuses on a diversified portfolio of India’s top 10 private sector banks. Given the recent underperformance in this sector, the fund aims to capitalize on anticipated growth in private banking.
Key Features:
NFO Period: September 2, 2024, to September 16, 2024
Fund Manager: Mr. Sharwan Kumar Goyal, Head – Passive, Arbitrage & Quant Strategies, UTI AMC
Benchmark: Nifty Private Bank TRI
Minimum Investment: Initial investment of Rs 5,000 and in multiples of Rs 1 thereafter. Subsequent investments under a folio can be Rs 1,000 and in multiples of Rs 1 thereafter, with no upper limit.
Plans Available: Regular and Direct Plans, both offering only the Growth Option.
Load Structure: No entry load as per SEBI regulations; exit load is also nil.
Investment Rationale: This fund provides access to a portfolio of 10 leading private banks at a time when sector valuations are below long-term averages but fundamentals remain strong. It aims to closely track the performance of the Nifty Private Bank Index, which has historically offered superior returns compared to broader indices like Nifty Bank and Nifty 50.
Expert Commentary
Sharwan Kumar Goyal, Head – Passive, Arbitrage & Quant Strategies at UTI AMC, commented, “The introduction of the UTI Nifty Private Bank Index Fund and UTI Nifty200 Quality 30 Index Fund represents a strategic move to provide investors with specialized investment opportunities. The UTI Nifty200 Quality 30 Index Fund offers a straightforward method to access a portfolio of high-quality companies within the large-cap and mid-cap universe. This fund aims to provide a cost-effective way to achieve better risk-adjusted returns compared to broad market indices.”
He further added, “The UTI Nifty Private Bank Index Fund allows investors to benefit from a diversified portfolio of leading private banks at favorable valuations. The fund is structured to align closely with the performance of the Nifty Private Bank Index, which has shown strong rolling returns relative to broader indices.”
For those interested in these new investment opportunities, the NFO period for both funds runs from September 2 to September 16, 2024.
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