SBI Nifty 500 Index Fund NFO: Review, Date & NAV

SBI Nifty 500 Index Fund: Complete Overview

SBI Mutual Fund launches SBI Nifty 500 Index Fund under its AMC SBI Funds Management Limited. This is an open-ended scheme that aims to replicate or track the Nifty 500 Index that involves top 500 Stocks by market cap across large-cap, mid-cap, and small-cap segments. 

The primary objective of the SBI Nifty 500 Index Fund is to deliver returns that, subject to tracking error, match the total return of the securities as represented by the underlying index.

The SBI Nifty 500 Index Fund NFO has a subscription amount of Rs.5000 and in multiples of Rs.1. The new fund offer will expire on September 24, 2024, however, subscribers may begin participating in this SBI NFO on September 17, 2024. This mutual fund scheme will be open for ongoing sale and repurchase within 5 business days from the date of allotment. The plan has a very high level of risk. It is not assured that the investing objective of the program will be achieved.

The SBI Nifty 500 Index Fund Scheme will invest 95-100% of its securities in the Nifty 500 Index Fund and 0-5% in Government Securities including Triparty Repo & liquid mutual fund units.

MD & CEO of SBI Funds Management Shamsher Singh said, "The SBI Nifty 500 Index Fund offers a comprehensive investment opportunity across India’s economy. Investors seeking exposure to large, mid, and small-cap companies at a relatively lower cost can consider this fund."

Deputy MD & Joint CEO, DP Singh stated, "This fund gives investors access to established and growing businesses in one product. It provides exposure to over 92% of the total market capitalization of listed companies, offering a broad sectoral and market-cap coverage."

If you want to learn about the latest trends, insights, and news of NFO Mutual Fund you can keep reading to understand the offerings of this new NFO below:

 

What is the Nifty 500 Index?

• The top 800 companies based on total market capitalization and average turnover

• The 500 largest corporations by market capitalization Asset Allocation and Restitution: Semi-Annual in March and September

• Weighting: determined by free-float market capitalization.

• The Nifty 500 Index holds 91.7% of the listed market cap representation.

India's market capitalization has increased dramatically in recent times and is predicted to rank third by 2028. Since the Nifty 500 is a larger market index, the growth story in India can help it.

Product Suitability

SBI Nifty 500 Index Fund is suitable for investors who are seeking:

• Long-term growth in wealth

• Purchasing securities that are part of the Nifty 500 Index.

  

Nifty 500 vs Nifty 50

• From June 1999 to August 2024, Nifty 500 has produced 42.6x returns with a CAGR of 14.45% whereas Nifty 50 has produced 29.9x with a CAGR of 16.07%.

• Although the Nifty 50 is more heavily weighted towards a small number of large-cap firms, the Nifty 500 provides a wider range of stock-level diversity across different market capitalizations and industries.

• This increased exposure can offer more balanced growth potential for market cycles and help reduce risk.

• In bull markets, the Nifty 500 Index usually performs better than large-cap companies, in down markets, it offers less volatility than midcaps and small-cap stocks. Because of this, it is a well-rounded choice for managing risk and growth over market cycles.

Scheme Plan: This new mutual fund scheme is available in two options:

SBI Nifty 500 Index Fund-Direct Growth Plan

SBI Nifty 500 Index Fund-Regular Plan Growth 

Both Plan offers-

a) Growth Option

b) Income Distribution cum Capital Withdrawal (IDCW).

 

SBI Mutual Fund Details

• India’s biggest MF house in terms of AUM size.

• The Assets Under Management (AUM) for SBI Mutual Funds schemes as of March 31, 2024, is Rs.9.14 lac crores.

• The market share of SBI MF’s AUM was 17.11% of the total AUM Mutual Fund Industry as of 31 March 2024.

Click Here To Stay Updated With The Upcoming NFOs.

 

Fund Overview

How to Invest in The Scheme After the Closure of The NFO?

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 after the allotment date, 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 “SBI Nifty 500 Index Fund” or directly with the AMC or simply click the ‘Banner’ below.

Scheme Objective

The goal of the SBI Nifty 500 Index Fund is to provide returns that equal the overall performance of the securities represented by the underlying index, subject to tracking error. However, 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 SBI Nifty 500 Index Fund

Since the SBI Nifty 500 Index Fund scheme is a new scheme, hence no comparable data on its past performance against its peers is available.

 

Risk Factors In Such Funds

• Trading volumes, settlement times, and transfer policies might limit how liquid the scheme's investments are.

• The returns of the scheme could differ from the underlying index.

• Leveraged instruments and derivative products have the potential to offer investors both excessive returns and losses.

• The returns from a legitimate investment deal may also be restricted by exposure to derivatives.

 

Past Performance of Index Funds

 

SBI Nifty 500 Index Fund-Growth Fund Managers:

• Viral Chhadva.

Conclusion

For long-term investors looking to gain exposure to the wider market through the Nifty 500 Index, the SBI Nifty 500 Index Fund is a great choice. It provides low-cost diversity with the possibility of generating money. Your investing horizon and risk tolerance should be taken into account. The Benchmark in which the Scheme will invest is more diversified. However, returns can not be guaranteed.

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