HDFC Nifty LargeMidCap 250 Index Fund NFO: Date, Review, NAV

HDFC Nifty LargeMidcap 250 Index Fund: Complete Overview

HDFC Mutual Fund has launched another fund under the aegis of HDFC Asset Management Company Limited the HDFC Nifty LargeMidcap 250 Index Fund. It is an open-ended scheme that replicates or tracks Nifty LargeMidcap 250 Index (TRI). The initial subscription (NFO) of this scheme opens on September 20 and closes on October 04, 2024, at a NFO price of Rs.100.

“HDFC has introduced this fund with more than twenty years of experience in Index Solutions. It offers a great chance to be a part of the growth of the country.” - Navneet Munot, MD and CEO at HDFC AMC.

Today at the HDFC Nifty LargeMidcap 250 Index Fund NFO Blog, we aim to center on the information that we feel will be of help to you regarding this new NFO i.e., its financial characteristics as well as any past performance.

 

HDFC Nifty LargeMidcap 250 Index Fund NFO- Details

The HDFC Nifty LargeMidcap 250 Index Fund scheme is suitable for investors who want to invest in equity securities that are included in the Nifty LargeMidcap 250 Index (TRI) to obtain returns that, over time and subject to tracking error, are consistent (before fees and expenditures) with the performance of the index.The scheme is a very high-risk scheme. There is no assurance that the scheme's investment goal will be met. The scheme will invest 95-100% in Securities covered by Nifty LargeMidcap 250 Index (TRI) and 0-5% in debt securities & money market instruments and Debt Schemes units of Mutual Funds.

If you're an established participant or new to the world of New Fund Offer, you've come to the right place to learn about the latest trends, insights, and news of NFO Mutual Fund. 

What are Laregcaps & Midcaps?

Laregcaps-

100 companies (top 100) comprise the Nifty 100 Index.

Midcaps-

150 companies (next 150) in the Nifty Midcap 150 Index.

 

Why largecaps and midcaps?

Largecaps provide the following:

• Top 100 companies based on market capitalization

• Firmly established companies

• Leaders of Markets

• Less erratic and more stable

• Key Industries: Auto, IT, and Financial Services.

Midcaps provide the following:

• 1st to 250th companies by market capitalization

• Mid-sized businesses

• Upcoming industry leaders

• More volatility in contrast to big caps

• Important Sectors: Auto Ancillaries, NBFCs, and Industrials

 

What is Nifty LargeMidcap 250 Index?

• All of the stocks in the Nifty Midcap 150 Index and Nifty 100 Index are included in the 250 stock index.

• The combined weight of midcap and largecap equities is 50% each.

• Over the last 1, 3, 5, and 10 years, respectively, the Nifty LargeMidcap 250 TRI has performed better than the Nifty 100 TRI but less well than the Nifty Midcap 150 TRI.

• Since FY06, the Nifty LargeMidcap 250 TRI has either underperformed or outperformed the Nifty 100 TRI and Nifty Midcap 150 TRI in 11 and 8 FYs, respectively.

• In FY 20222, FY 2023, and FY 2024 returns of Nifty LargeMidcap 250 TRI have been 22.9%, 0.6%, and 46.0% respectively whereas returns of Nifty 100 TRI have been 20.6%, -1.6%, and 34.8% respectively.

 

Why invest in HDFC Nifty LargeMidcap 250 Index Fund?

• Wide exposure to the Indian economy through investments in 250 equities that offer a variety of exposure across size segments and industries.

• The largecap and midcap index winners fluctuate from year to year, therefore it makes sense to be exposed to both market capitalization categories.

• Take advantage of a single product that combines the growth potential of midcaps with the relative stability of largecaps.

• In a single offering, the stability of largecaps with the development potential of midcaps

• Because the Underlying Index is rebalanced every quarter, investors can conveniently and tax-efficiently maintain a 50:50 allocation to large and midcap stocks.

• The best investment vehicle over the long term because of its lower expense ratios.

 

HDFC Mutual Fund Details:

• The market share of HDFC AUM was 11.25% of the industry’s total AUM as of December 2023

• One of the largest fund houses in India

• 19 ETFs, 21 Index Funds & 3 FoFs are currently in its product range.

 

Click Here To Stay Updated With The Upcoming NFOs.

Fund Overview

How To Invest In The NFO After The Closure Date?

If you have missed participating in the NFO and now want to invest in the same Scheme on a continuous basis, then within 5 business days from the date of allotment, when the Scheme will reopen; you will have the option to participate and invest directly in the Mutual Fund by spending at NAV based price by logging on to your Demat account and search for “HDFC Nifty LargeMidcap 250 Index Fund” or directly with the AMC or simply click the ‘Banner’ below.

The Objective of The Fund

Subject to tracking error, The Scheme aims to produce comparable results (before fees and expenses) with the performance of the Nifty LargeMidcap 250 Index (TRI). Nevertheless, there can be no assurance or guarantee that the scheme's investment goals will be met.

 

Asset Allocation (% of Total Assets) of the Scheme's portfolio will be as follows:

Peers of HDFC Nifty LargeMidcap 250 Index Fund

Since this scheme is a new scheme, hence no comparable data on its past performance against its peers is available.

 

Risk Factors In Such Funds

• The Scheme will not be actively managed because it plans to invest at least 95% of net assets in the Underlying Index's securities in the same ratio. The Scheme's success will be directly impacted by the Underlying Index's performance. A widespread fall in the Indian markets with respect to its Underlying Index could have an impact on the Scheme.

• All of the firms from the Nifty 100 and Nifty Midcap 150 are included in the Nifty LargeMidcap 250 Index (TRI), also known as the ‘Underlying Index’ of which HDFC Asset Management Company Limited (‘HDFC AMC’) is one of the representative entities. As of August 30, 2024, HDFC AMC's index weight is 0.65%. The companies that make up the Underlying Index must meet the requirements for eligibility set out by the index provider. The index provider independently manages the overall index governance, HDFC AMC or its Sponsor / Trustee Company has no control or influence over this process.

• The scheme's success will be directly impacted by the Nifty LargeMidcap 250 Index (TRI)'s performance. Therefore, any modification in composition due to weighting or stock selection will affect the scheme.

• Equities shares and associated instruments are prone to daily price swings and are considered volatile. There is some risk associated with investing in stock shares and equities-related products. 

 

Past Performance of LargeMidcap 250 Index Funds

 

HDFC Nifty LargeMidcap 250 Index Fund- Fund Managers:

• Nirman Morakhia

• Arun Agarwal

Conclusion

The HDFC LargeMidcap 250 index fund has been created with a vision to gain long-term capital appreciation by investors having a higher risk appetite with investments being made to large as well as mid-cap equities proportionately. On top of that the Fund takes a wider approach where it invests in approximately 250 different stocks across various sectors, therefore making it a stable investment with large-cap stocks while at the same time offering a growth potential with mid-cap stocks. 

This is however aggressive because of the market volatility associated with it and can only be suitable for people whose objectives are in line with it. Always assess your financial targets and take advice from a financial planner before making any investment.

Disclaimer: This NFO analysis is provided solely for informative reasons and should not be construed as investment advice. Always conduct research and talk with a financial advisor before investing.