Mirae Asset Mutual Fund announced the launch of Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF and fund of fund route to it, ‘Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF Fund of Fund'
NFO Details
The New Fund Offer (NFO) for Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF run from May 6, 2024 till May 17, 2024.
Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF is India’s first mutual fund scheme on Mid and Smallcap segment, the fund house claimed. The fund's portfolio will consist of 50 Midcap and 50 Smallcap stocks, selected basis quality, momentum, and liquidity parameters. This ETF will be open-ended scheme tracking Nifty MidSmallcap400 Momentum Quality 100 Total Return Index.
Since ETFs are traded on stock exchange, to invest in them, one must have a demat account. Another route is to invest in ETFs through the fund-of-fund route.
As this alternate route, Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF Fund of Fund (F-O-F) will be launched that invest in units of Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF. The NFO for this Fund of Fund will run from May 10, 2024 to May 24, 2024.
In both schemes, the minimum initial investment during NFO will be Rs 5,000, with subsequent investments being multiples of Re 1.
Investment Considerations
As an ETF, this fund will track the benchmark index, which presents opportunities in both Midcap and Smallcap segment by having an equal number of stocks from both segments in a 100-stock portfolio at the time of rebalancing.
The S&P BSE SmallCap index surged around 60 per cent in one year, but the surge has slowed after Sebi warning on froth in mid and small cap space. After the warning, the slump is evident if we look at YTD returns (9.98 per cent), nevertheless much higher compared to the broader BSE Sensex which is up nearly one per cent.
The S&P BSE midcap index has surged 14 per cent in 2024, but in last one year the surge is an impressive 63 per cent.
Siddharth Srivastava, Head – ETF Product and Fund Manager, said the fund targets to tap highly profitable companies "with low leverage and stable earnings growth which have given relatively higher risk adjusted returns in the last 6 month and 1 year period." By investing in these funds, investors can gain exposure to both Mid and smallcap companies, with a risk profile more aligned to Midcap segment, Srivastava said.
