HDFC Nifty Top 20 Equal Weight Index Fund Files Draft with SEBI

HDFC Mutual Fund has filed a draft scheme information document with SEBI for the HDFC Nifty Top 20 Equal Weight Index Fund. This is an open-ended index fund that aims to replicate the Nifty Top 20 Equal Weight Index (TRI). The fund is designed to deliver returns similar to the index before fees and expenses, subject to tracking errors.

Fund Structure and Objective

Unlike traditional index funds where stocks are weighted based on market capitalization, this scheme assigns equal weight to all 20 stocks in the index. This means no single stock has a disproportionate impact on the portfolio, reducing concentration risk.

The fund is structured to provide exposure to 20 large-cap companies, to provide diversification while following a passive investment strategy.

Asset Allocation

• 95% – 100%: Equity securities covered under the Nifty Top 20 Equal Weight Index
• 0% – 5%: Debt and money market instruments

The allocation ensures that the fund remains closely aligned with the underlying index while maintaining some liquidity.

Fund Details

• Category: Index Fund
• Benchmark: Nifty Top 20 Equal Weight Index (TRI)
• Investment Objective: Replicate the index performance over the long term
• Minimum Investment: ₹100 and multiples of ₹1 thereafter
• NFO Price: ₹10 per unit
• Expense Ratio: Capped at 1%
• Liquidity: Open-ended, allowing daily transactions post-NFO

Tracking Error and Risks

Since this is a passive fund, its performance depends on how accurately it replicates the index. Factors like tracking error, cash balance, corporate actions, and market fluctuations could cause slight deviations in returns.

The fund is awaiting SEBI approval. Once cleared, HDFC AMC will announce the NFO dates. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.