The new fund offer (NFO) for the scheme is open for subscription and will close on October 28. The scheme will reopen for continuous sale and repurchase within five business days from the date of allotment.
This passively managed, low-cost equity fund provides investors with diversified exposure to potential high-growth midcap stocks. The scheme will offer a more diversified portfolio across sectors compared to the NSE Nifty 50 Index, thereby reducing sector concentration risk, according to a press release from the fund house.
The fund aims to track the performance of the Nifty Midcap 150 Total Return Index, which comprises midcap companies that have the potential to become large caps in the future. By investing in this fund, investors may gain access to sectors such as capital goods, chemicals, real estate, and textiles, which are either underrepresented or absent in the Nifty 50 Index, the release noted.
“According to the S&P Indices vs Active Report, 75% of mid/small-cap funds have underperformed their benchmarks over the last 10 years. Our NFO offers a low-cost, passive investment solution that aims to mirror the performance of the Nifty Midcap 150 Index, reducing the risk of underperformance and seeking to provide a better opportunity for growth,” said Suresh Soni, CEO, Baroda BNP Paribas Asset Management India.
The scheme will be benchmarked against the Nifty Midcap 150 Total Returns Index and will be managed by Neeraj Saxena. An exit load of 0.2% will apply if shares are redeemed on or before seven days from the date of allotment; the exit load will be nil if redeemed after seven days.The minimum investment amount is Rs 1,000, with subsequent investments in multiples of Re 1. The scheme will allocate 95-100% to equity and equity-related securities of companies constituting the Nifty Midcap 150 Total Return Index, and 0-5% to money market instruments, units of liquid schemes, and cash equivalents.The fund is suitable for investors seeking long-term capital growth who want investments in equity and equity-related securities that replicate the composition of the Nifty Midcap 150 Index, with the aim of achieving returns consistent with the stated index, subject to tracking error.