HDFC Mutual Fund launches 2 Smart Beta ETFs; offer closes on 6 October – details here

HDFC Asset Management Company Ltd has launched two Smart Beta ETFs (Exchange Traded Funds) with a view to expand its suite of HDFC MF Index Solutions, the company said in a media release.

HDFC AMC, which manages assets worth Rs 4.34 trillion has launched HDFC NIFTY200 Momentum 30 ETF and HDFC NIFTY100 Low Volatility 30 ETF, the release said. The New Fund Offer (NFO) which started on 26 September will close on 6 October.

Smart Beta investing involves stock selection and weighting based on factors, unlike underlying index methodology of NIFTY 50 which is based on size.

“These investment strategies endeavour to provide better risk-adjusted returns than broad market cap weighted indices,” the release said.

The indices underlying the additional Smart Beta ETFs - HDFC NIFTY200 Momentum 30 ETF & HDFC NIFTY100 Low Volatility 30 ETF –have generated higher long-term returns than the Nifty 200 TRI and the NIFTY 100 TRI, respectively.

Both have generated higher average rolling returns over 1, 3, 5 and10 year horizons compared to the NIFTY 200, 100 and 50 TRI, the release claimed.

“Smart Beta investing is popular globally with AUM rising steadily. HDFC AMC is happy to expand index solution offerings for investors that are backed by empirical research,” Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Company said.

“Smart Beta ETFs offer one-shot diversification of portfolio at a low cost, and is proven tool for investors who seek returns over the long-term,” he added.

The investment can be made with a minimum amount of Rs 500 per application and in multiples of Re 1 thereafter.

HDFC NIFTY200 Momentum 30 ETF

- An open ended scheme replicating /tracking NIFTY200 Momentum 30 Index (TRI)

- Returns that are commensurate (before fees and expenses) with the performance of the Underlying Index NIFTY200 Momentum 30 Index(TRI) and NIFTY100 Low Volatility 30 Index(TRI) respectively over long term, subject to tracking error.

HDFC NIFTY100 Low Volatility 30 ETF

- An open ended scheme

- Replicating/ tracking NIFTY100

- Low Volatility 30 Index (TRI)

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