January 29, 2023

The NFO will open for subscription on July 18 and shut on August 1

July 14, 2022 / 03:01 PM IST

Consultant picture.

Quantum Mutual Fund on July 14 introduced the launch of the nation’s first Nifty 50 ETF Fund of Fund. The fund will put money into the items of Quantum Nifty 50 ETF.

Chirag Mehta, chief funding officer, Quantum MF, stated that Nifty ETF FoF is a extra environment friendly construction than a Nifty 50 Index Fund. “Every unit of Nifty ETF represents 1/10th of the worth of Nifty Index. This permits small inflows within the fund to get simply deployed. Whereas with a Nifty Index Fund you want round Rs 20 lakh of influx to correctly replicate the index. This might result in greater monitoring error,” he stated.

The Nifty ETF FoF’s complete expense ratio (TER) may very well be round 15 foundation factors in a direct plan. The most affordable Nifty Index fund at current is Navi Nifty 50 Index Fund, which expenses TER of 6 bps within the direct plan.

Then there’s IDFC Nifty 50 Index Fund which expenses TER of 10 bps within the direct plan.

Nonetheless, the ultimate price for buyers wouldn’t be simply the TERs, but in addition depend upon which fund sort has much less monitoring distinction vis-à-vis Nifty 50 Index returns over the funding interval.

Each FoF and Index Fund buildings enable buyers who do not have a demat account to put money into an ETF. For investing in an ETF, a demat account is necessary

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The Quantum Nifty 50 ETF FoF New Fund Supply (NFO) opens for subscription on July 18 and closes on August 1.