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UTI Mutual Fund launched a new index fund, UTI Nifty Midcap 150 Quality 50 Index Fund, that replicates the Nifty Midcap 150 Quality 50 TRI.

Furthermore, the New Fund Offer (NFO) period for the UTI Nifty Midcap 150 Quality 50 Index Fund is from March 28th 2022 to April 5th 2022. Also, the UTI Nifty Midcap 150 Quality 50 Index Fund re-opens for continuous repurchases and sales on April 13th 2022.

Objective

The investment objective of UTI Nifty Midcap 150 Quality 50 Index Fund is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.

However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.

UTI Nifty Midcap 150 Quality 50 Index Fund Details

Fund NameUTI Nifty Midcap 150 Quality 50 Index Fund
NFO Opening DateMarch 28th 2022
NFO Closing DateApril 5th 2022
Re-open DateApril 13th 2022
Type of FundOpen-ended Index Scheme
Fund ManagerMr Sharwan Kumar Goyal
Minimum Investment AmountINR 5,000
Minimum Additional Purchase AmountINR 1,000
Exit LoadNIL
SuitabilityVery High
BenchmarkNifty Midcap 150 Quality 50 TRI
Plans and OptionsRegular Plan & Direct Plan
NOTE:
  • All the investment amounts should be multiple of INR 1/-

Who Should Invest in UTI Nifty Midcap 150 Quality 50 Index Fund NFO?

This index fund invests in 50 midcap companies tracked by the Nifty Midcap 150 Quality 50 index. Also, the benchmark index comprises of 50 companies from its parent Nifty Midcap 150 index. Midcap stocks have a good potential for growth while being prone to significantly higher risk.

Investors seeking exposure to the midcap companies and, at the same time, wish to invest in reasonably high-quality businesses can consider investing in this fund. Furthermore, if you wish to invest in a passive fund that takes a systematic approach, UTI Nifty Midcap150 Quality 50 Index Fund will be a suitable option. Also, the fund strictly replicates the benchmark index, which follows a quality selection methodology to identify the mid companies.

Therefore, investors seeking exposure to mid-cap companies and risk-takers can consider investing in the scheme. Also, the scheme offers good diversification by investing across 50 mid-cap stocks that are part of different industries. Moreover, The scheme’s exposure to mid-cap funds makes it extremely volatile. As a result, investors with a high-risk tolerance and a long investment horizon (5 years or more) might consider investing in the fund.

Explore: Best Nifty 50 Index Funds to Invest in 2022

Fund Manager

  • Mr Sharwan Kumar Goyal: Mr Sharwan is currently the Vice President and also the Fund Manager – Domestic Equity Department at UTI Asset Management Company (AMC). He has more than 11 years of experience in equity research, portfolio analysis and risk management. Moreover, he started his career at UTI in 2006. Furthermore, Mr Sharwan holds a post-graduate degree in Management (MMS) from Welingkar Institute, Mumbai. Also, he is a CFA Charter holder from CFA Institute, USA. Mr Sharwan currently manages more than 10 funds at the fund house.

Asset Allocation

UTI Nifty Midcap 150 Quality 50 Index Fund aims to closely replicate the benchmark index, however with minimum tracking error. The UTI Nifty Midcap150 Quality 50 Index Fund employs a passive approach by investing in the same stocks as the NIFTY Midcap150 Quality 50 Index, which is constructed using the following ‘Quality Filters’ inside the midcap universe.

The following is the indicative asset allocation of the fund.

Types of InstrumentsIndicative Allocation MinimumIndicative Allocation MaximumRisk Profile
Equity and Equity Related securities are covered by the Nifty Midcap150 Quality 50 Index95%100%Medium to High
Debt and Money Market Instruments05%Low to Medium

Also, as per the SEBI Regulations, the scheme may participate in securities lending. The following are limits for stock lending –

  • Not more than 20% of the scheme’s net assets can generally be deployed in Stock Lending.
  • Not more than 5% of the scheme’s net assets can generally be deployed in Stock Lending to any single counterparty (as may be applicable).

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UTI Nifty Midcap 150 Quality 50 Index Fund NFO Review

UTI Nifty Midcap150 Quality 50 Index Fund is a low-cost smart beta index fund. Thus, the fund passively follows the NIFTY Midcap 150 Quality 50 Index. The fund primarily invests in the same stocks and also the same proportions as the NIFTY Midcap 150 Quality 50 Index. The strategy is to achieve a return that is comparable to the underlying index while minimizing tracking error.

Since the UTI Nifty Midcap150 Quality 50 Index Fund invests across mid-cap stocks, it is a high-risk investment option. Thus, investors must have a long-term investment approach to average out the market volatility.

Investors who understand the mid-cap category and also can monitor the performance of the stocks can consider investing in this scheme. Furthermore, the scheme is ideal for investors looking for exposure to midcaps and have a long-term investment horizon. Also, the index fund structure is well-suited for systematic investing. Moreover, investing in UTI Nifty Midcap150 Quality 50 Index Fund is a hassle-free and low-cost investing solution.

Since UTI Nifty Midcap 150 Quality 50 Index Fund is a pure equity scheme and mid-cap focused, a long-term investment horizon is a must. Furthermore, because the fund does not guarantee returns, it is advisable to monitor the investments closely.

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