Groww Mutual Fund has announced the launch of a passive investment scheme, Groww Nifty Private Bank ETF, an open-ended exchange-traded fund that seeks to track the performance of the Nifty Private Bank Index – Total Return Index (TRI), subject to tracking error.
The new fund offer (NFO) of the fund is open for subscription and will close on May 20. The fund will reopen for continuous sale and repurchase on or before June 4.
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The investment objective of the Scheme is to generate long-term capital growth by investing in securities of the Nifty Private Bank Index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of the Nifty Private Bank Index, subject to tracking errors.
The ETF aims to provide investors with a transparent and rules-based way to gain exposure to India’s private banking segment. The performance of the fund will be benchmarked against the Nifty Private Bank Index TRI and will be managed by Nikhil Satam, Aakash Chauhan, and Shashi Kumar.
The minimum application amount is Rs 500 and in multiples of Re 1 thereafter. The fund will allocate 95-100% in constituents of Nifty Private Bank Index and 0-5% in money market instruments/debt securities, instruments and/or units of debt/liquid schemes of domestic mutual funds.
The investment strategy of the scheme will be to invest in a basket of securities forming part of the Nifty Private Bank Index in a similar weight proportion. The investment strategy would revolve around reducing the tracking error to the least possible through regular rebalancing of the portfolio, considering the change in weights of stocks in the Index as well as the incremental collections/redemptions in the scheme.
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The exit load is nil. The fund is suitable for investors who are seeking long-term capital appreciation and want investment in equity and equity-related instruments of the Nifty Private Bank Index.
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