Aditya Birla Sun Life AMC Limited (formerly known as Birla Sun Life Asset Management Company Ltd.), a subsidiary of Aditya Birla Capital Limited (formerly known as Aditya Birla Financial Services Ltd.), and investment manager to Aditya Birla Sun Life Mutual Fund (ABSLMF) announced the launch of Aditya Birla Sun Life Nifty Next 50 ETF (“the ETF”), an open ended scheme tracking Nifty Next 50 Index.
The ETF offers investors an opportunity to invest in the next rung of 50 stocks below Nifty 50. The ETF will hold all the securities forming the Nifty Next 50 Index in the same proportion of the index. The new fund offer would open for subscription on December 11, 2018 and would close at the end of business hours on December 17, 2018. The ETF will reopen for continuous sale and repurchase within five business days from the date of allotment. The investment objective of the scheme is to provide returns that closely correspond to the total returns of securities as represented by Nifty Next 50 Index, subject to tracking errors.
Commenting on the launch, A. Balasubramanian, CEO, Aditya Birla Sun Life AMC Limited said: “The stocks comprising Nifty 50 and the Nifty Next 50 make up the 100 most liquid stocks within the large-cap universe. The Nifty Next 50 Index focuses on stocks that have the potential to grow and move to the top. This is hence a compelling proposition to tap into India’s growth story.”
Explaining further, Mr. Balasubramanian said, “It is also observed over a longer period of time, Next Nifty 50 companies tend to deliver better performance over the main indices given the nature of the size of companies and its future growth potential.”
ETFs are mutual funds listed and traded on stock exchanges like shares. Due to the unique structure of ETFs, all types of investors, whether retail or institutional, long- term or short-term, can use it to their advantage. Investors can complement their core equity portfolio with this kind of a financial instrument.
“Nifty Next 50 has a well-diversified portfolio across sectors with relatively less concentrated exposure to any one sector. For instance, the Top 5 sectors in Nifty Next 50 account for 76% exposure as compared to 84% in case of Nifty 50,” said A. Balasubramanian.
The fund will have zero entry or exit load and can be bought or sold from the exchanges during the day when the markets are open post NFO. The minimum application amount for this fund is Rs 5,000, and in multiples of Rs 1,000 thereafter, during the new fund offer period. Aditya Birla Sun Life Nifty Next 50 ETF will be managed by Lovelish Solanki, Fund Manager, Aditya Birla Sun Life Mutual Fund.