Bandhan Mutual Fund is pleased to announce Total Market Index Fund NFO. The NFO will open for initial subscription on June 24, 2024 and close on July 5, 2024. It will open for subscription again after 5 business days. The fund will invest in the Total Market Index, which includes 750 stocks. Bandhan Nifty Total Market Index Fund NFO? What are the risk factors for such a mutual fund scheme?
Bandhan Nifty Total Market Index Fund NFO – Issue Details
| Fund Name | Bandhan Nifty Total Market Index Fund |
| NFO opens | June 25, 2024 |
| NFO is closed | July 5, 2024 |
| Scheme for continuous purchase/sale resumes | Within 5 business days |
| Minimum application amount | 1,000 rupees, and thereafter in increments of 1 rupee |
| Minimum SIP | 100 for six months. |
| Fund Net Asset Value | 10 during the NFO period, Rs. |
| Entry Load | zero |
| End Load | 0.25% – if redeemed within 15 days from the date of allocation |
| danger | Very high risk |
| standard | Nifty Total Market TRI |
| Fund Manager | Nemish Sheth |
What is the purpose of this scheme and where will it be invested?
The investment objective of the scheme is to replicate the Nifty Total Market Index by investing in the same proportion/weighting in the securities of the Nifty Total Market Index with the aim of providing a return before expenses that tracks the total return of the Nifty Total Market Index, subject to tracking error.
The scheme invests in the overall market index and a small amount in the debt component. The allocation details are as follows:
| Instrument type | Min % | Max % | Risk Profile |
|---|---|---|---|
| Securities that fall under the Nifty Total Market Index (including equity and index derivatives) |
95% | 100% | Very expensive |
| Debt and Money Market Instruments | 0% | Five% | Low to moderate |
What is the Total Market Index?
- The Nifty Total Market Index tracks the performance of 750 stocks covering the largecap, midcap, smallcap and micro-smallcap segments.
- All stocks in the Nifty 500 index and Nifty Microcap 250 index form part of the Nifty Total Market index. The weightage of stocks in the index is based on their free float market capitalization.
- The index was launched in October 2021, but the underlying data has been compiled since April 2005.
- The sector composition of the index includes financial services (28.2%), oil, gas & consumable fuels (8.7%), IT (8.3%), automobile & auto components (7.4%), FMCG (6%), capital goods (6.3%), healthcare (5.5%), power (4%) and metals & mining (3.8%).
- The top 10 constituents of the index are HDFC Bank, Reliance Industries, ICICI Bank, Infosys, L&T, ITC, TCS, Bharti Airtel, Axis Bank and SBI.
- According to NiftyIndices, Nifty Total Market Index The company has achieved a CAGR of 15.2% in revenue since its inception in 2005. Over the past five years, the CAGR of revenue is 18.1%, and over the past year, it is 36.1%.
Bandhan Nifty Total Market Index Fund NFO – Positive Factors
Investors can consider the following positive factors:
- The index contains Nifty 500 + Nifty Microcap 250 = 750 stocks. Such a large list of stocks provides diversification of stocks across largecap, midcap, smallcap and microcap segments.
- India’s GDP growth rate is 9Number 2023 ranking: 5Number It is projected to be third in 2023.rd India is expected to rise in the rankings over the next four years (2028). This creates a huge opportunity for investors to capitalize on India’s growth story in the coming years.
- As mentioned in our previous articles, investing in large cap stocks gives stable returns while investing in mid/small cap stocks gives very high returns but also involves risk.
Risk Factors for Bandhan Nifty Total Market Index Fund NFO
Not all is well. Here are some key risk factors:
- This total market index includes 150 mid-cap and 250 small-cap stocks that are considered highly risky.
- The index also includes 250 microcap stocks, which are very risky. Generally, microcap stocks are less liquid and more volatile. There are several examples of investors who lost money by investing in individual stocks in the microcap segment.
- Investors can read all risk factors below. Bandhan Nifty Total Market Index Fund NFO Prospectus
Bandhan Nifty Total Market Index Fund NFO – Should You Invest?
This mutual fund scheme invests in the Total Market Index, which comprises of 750 stocks across largecap, midcap, smallcap and microcap segments. While the largecap segment gives stable returns, the midcap and smallcap stocks are riskier and also generate higher returns. The microcap component of the index is highly risky and highly volatile.
High risk investors looking for medium to long term investment can invest in such funds. Low or medium risk investors are advised not to invest in such funds.
Suresh KP is the Founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and NISM Certified Research Analyst. He has been involved in analyzing financial markets for the last 20 years. He can be reached at suresh@myinvestmentideas.com.
