Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund NFO Review

Introduction

Do you include yourself among those who want to invest in mutual funds and who are keen to show yourself as a leader in this market? Or do you want to invest your money to make it big?

We're back with another thought-provoking and informative blog post that can help you with your next financial step. So, this time, we've devised the business concept of the 'Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund'.

This article will describe what is included in the fund program and how it works.

 

Everything You Need to Know About Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund - NFO

The Mirae Asset Mutual Fund introduced the Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund, an open-ended mutual fund scheme, on July 8, 2024. The scheme invests in units of the Mirae Asset Nifty200 Alpha 30 ETF intending to generate long-term capital appreciation.

The investment window is open from July 08 to July 22, 2024, with a starting price of Rs.5000 with a 0.50% Exit Load if redeemed within 3 months and no Entry Load.

To learn about the fund's asset allocation, and other financial characteristics that influence decision-making, carefully read this blog.

 

 

Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund - NFO Overview

The scheme is suitable for investors who want to invest in Mirae Asset Nifty200 Alpha 30 ETF and desire long-term capital growth. 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% of its funds in Units of Mirae Asset Nifty200 Alpha 30 ETF, and 0-5% in money market instruments, debt securities, and liquid schemes of mutual funds.

 

Fund Overview

The minimum subscription amount is set at Rs.5000 and in multiples of Rs.1 thereof with a 0.50% exit load if redeemed within 90 days.

Start Date	08 July 2024
End Date	22 July 2024
VRO rating	-
Expense ratio	NA
Exit load	0.50% if redeemed in 3 months
AUM	157,615 crore
Lock-in	No Lockin
Stamp Duty	0.005% (From July 1st 2020)
Benchmark	Nifty 200 Alpha 30 TRI (Total Return Index)
Min. Investment	Rs.5000
Risk	Very High
Short-term capital gains (STCG)	For less than 3 years, as per Tax Slab
Long-term capital gains (LTCG)	For more than 3 years, 20% is applicable.

 

The Objective of the Fund

The Scheme intends to produce long-term capital growth from a portfolio that contains Mirae Asset Nifty200 Alpha 30 ETF units. Nevertheless, there can be no assurance or guarantee that the scheme's investment goals will be met.

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

Types of Instruments	Minimum Allocation (% of Net Assets)	Maximum Allocation (% of Net Assets)
Units of Mirae Asset Nifty200 Alpha 30 ETF	95	100
Money Market instruments debt securities, and liquid schemes of mutual funds.	0	5

 

 

Peers of Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund 

Index / Debt Funds	1Y Return	AUM (Cr)
ICICI Prudential Nifty Alpha Low Volatility 30 ETF FOF	47.81%	468.07

Since this scheme is a new scheme , hence no comparable data of its performance with its peers is available.

 

Risk Factors in Such Funds

• The Fund of Funds plan may result in inconsistent expense charging over time because it will invest in an underlying scheme, and the expense paid will depend on the underlying scheme's structure, which may differ.

• For a variety of reasons, the fund of funds scheme may perform or yield different returns than the underlying scheme. The Fund of Funds' return could be negatively influenced by many factors such as the overall expense ratio, cash drag, timing and pricing discrepancies between the subscription and redemption in the Fund of Funds and the underlying scheme, as well as operational and transactional issues.

• Bonds, debentures, and money market instruments are examples of fixed income securities that are subject to interest rate or price risk. Existing fixed-income assets typically see price increases in response to drops in interest rates, and vice versa. The current coupon, the number of days till maturity, and the change in interest rates all affect how much prices fall or rise..

• Higher concentration risk can arise from the Scheme portfolio's increased exposure to a particular sector, up to a maximum of 20% of net assets, contingent on the presence of offerings in the marketplace at the time of investing. Any modification to the business environment or governmental policies that are pertinent to the industry could be detrimental to the portfolio.

• In times when interest rates are dropping, the issuer of some fixed income instruments may choose to call back the securities prior to their maturity date. The potential for such prepayment may compel the fund to reinvest the gains from these assets in securities with lower yields, which would reduce the fund's interest income.

 

Past Performance of Index / Debt / ETF Funds

Index / Debt Funds	NAV (Rs)	Annualized Return (1Y)	Return/Risk
Edelweiss Nifty Smallcap 250 Index Fund - Direct Plan-Growth	17.66	64.78%	Very High Risk
Nippon India Nifty Smallcap 250 Index Fund - Direct Plan-Growth	33.896	63.96%	Very High Risk
SBI Nifty Smallcap 250 Index Fund - Direct Plan-Growth	18.58	64.37%	Very High Risk

 

Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund NFO - Who can invest?

This fund is ideal for those who wish to invest in units of the Mirae Asset Nifty200 Alpha 30 ETF intending to generate long-term capital appreciation.

 

 

Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund NFO - Growth Fund Managers

• Ms. Ekta Gala

• Mr. Vishal Singh
  
  

Conclusion

For investors looking to diversify their portfolios through investments in the Nifty200 Alpha 30 ETF, the Mirae Asset Nifty200 Alpha 30 ETF Fund of Fund- NFO offers an enticing option. The goal of this NFO is to generate returns that closely mirror the performance of the Nifty200 Alpha 30 Index. Always assess your Financial Goals, Risk tolerance, time horizon etc. before making an investment decision. 

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.