SBI Mutual Fund on September 20, 2022 announced the launch of two equity index funds. Named SBI Nifty Midcap 150 Index Fund and SBI Nifty Smallcap 250 Index Fund, the two open-ended schemes would replicate the performance of their underlying indices – Nifty Midcap 150 Index and Nifty Smallcap 250 Index, respectively.
The new fund offer (NFO) will close on September 26, 2022, SBI MF announced in a press release.
The minimum application amount required for both funds is Rs. 5,000 and in multiples of Re. 1 thereafter. Investments can also be done daily, weekly, monthly, quarterly, semi-annually or annually through the systematic investment plan (SIP) mode.
According to SBI MF, the schemes would invest a minimum of 95 per cent and a maximum of 100 per cent of its assets in securities covered by the underlying indices – Nifty Midcap 150 Index and the Nifty Smallcap 250 Index, with up to 5 per cent in money market instruments. These would include, among others, commercial papers, commercial bills, Treasury bills, triparty repo, and G-Secs having an unexpired maturity up to one year, call or notice money, certificates of deposit, bills, and any other similar instruments as specified by the Reserve Bank of India (RBI) from time to time and units of a liquid mutual fund.
According to the press release, the investment objective of the scheme is to provide returns that closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error. The benchmarks for these funds are Nifty Midcap 150 TRI and Nifty Smallcap 250 TRI, respectively.
SBI Mutual Fund said the new schemes would be suitable for investors who are seeking long-term capital appreciation through investments in securities covered by the Nifty Midcap 150 Index and the Nifty Smallcap 250 Index to gain access to the potential growth of the companies in the underlying indices.
Says DP Singh, deputy managing director and chief business officer, SBI Mutual Fund: “As a fund house, we continue to expand our bouquet of offerings in the passive investment space. Mid- and small-cap index funds provide a gateway to investors looking to tap into the growth potential of these emerging businesses as they move up the market capitalisation curve from being small caps to mid-caps and eventually large caps. Investors, especially first-time equity investors, can consider investing in these two funds in line with their risk profile for their long-term wealth creation goals.
