HDFC Mutual Fund Launches Three Smart Beta Funds

HDFC Asset Management Company Ltd has announced the launch of Nifty100 Quality 30 ETF, Nifty50 Value 20 ETF and Nifty Growth Sectors 15 ETF, in order to expand its suite of HDFC MF Index Solutions.
Smart beta investing involves stock selection and weighing that is done based on pre-defined factors, as defined in the underlying index methodology by NSE Indices Ltd.
These investment strategies look to provide better risk-adjusted returns than broad market-cap weighted indices.
As per the fund house, the indices underlying the smart beta exchange-traded funds (ETFs) - the Nifty100 Quality 30 Total return Index (TRI), Nifty50 Value 20 TRI and Nifty Growth Sectors 15 TRI - generated higher average rolling returns over one, three, five and 10-year horizons compared to the Nifty 100 and Nifty 50 TRI.
Navneet Munot, managing director and chief executive officer, HDFC Asset Management Co. Ltd, said, “Smart beta investing is popular globally with assets under management (AUM) rising steadily. Smart Beta ETFs offer one-shot diversification of portfolio at a low cost, and is proven tool for investors who seek returns over the long-term.“
The Nifty100 Quality 30 index includes top 30 companies from its parent Nifty 100 index, selected based on their ‘quality’ scores. The quality score for each company is determined based on return on equity (ROE), financial leverage (Debt/Equity Ratio) and earning (EPS) growth variability analysed during the previous 5 years.
The Nifty50 Value 20 Index is designed to reflect the behaviour and performance of a diversified portfolio of value companies forming a part of Nifty 50 Index. It consists of the 20 most liquid value blue chip companies listed on NSE.
Nifty Growth Sectors 15 Index comprises of 15 companies listed on National Stock Exchange of India & on which, stock derivatives are available. The constituent weights are capped at 15%.
As per the fund house, investors can consider diversifying their investments across factors based on individual preferences, since performance of various factors changes across different market environments. With a minimum investment of Rs500 per ETF, this is an opportunity for investors to diversify across all three smart beta ETFs.
The new fund offer (NFO) for the three ETFs would remain open from9th to 20th September and the fund manager to the schemes would be Krishan Kumar Daga.
The minimum investment in the schemes during the NFO period would be Rs500 and there would be no exit load for the schemes.
Source:HDFC Mutual Fund



To continue

Sign Up or Sign In


We are listening!

Solve the equation and enter in the Captcha field.

Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu