Zerodha Nifty LargeMidcap 250 Index Fund
Zerodha Nifty LargeMidcap 250 Index Fund is an open-ended scheme replicating/ tracking Nifty LargeMidcap 250 Index.The new fund offer or NFO of the scheme is open for subscription and it will close on November 3. The scheme will re-open for continuous sale and repurchase within five business days.
The scheme will be benchmarked against Nifty LargeMidcap 250 Index TRI. The minimum application amount is Rs 100 and in multiples of Re 1 thereafter.
The investment objective of the scheme is to generate returns that are commensurate with the performance of the Nifty LargeMidcap 250 Index TRI (underlying Index), subject to tracking error. The scheme will allocate 95-100% in equities and equity related securities covered by Nifty LargeMidcap 250 Index, and 0-5% in debt and money market instruments.
The scheme is a passively-managed index fund, which endeavours to invest in stocks in proportion to the weightage of the stocks in the Nifty LargeMidcap 250 Index. The investment strategy would revolve around reducing the tracking error to the least possible extent through regular rebalancing of the portfolio, taking into account the change in weights of stocks in the Index as well as the incremental collections/redemptions in the scheme. Such rebalancing shall be done in accordance with timelines prescribed by SEBI from time to time.
The scheme is suitable for investors who are seeking long-term capital growth, and want investment in equity and equity related securities covered by Nifty LargeMidcap 250 Index.
Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund
Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund is an open-ended passive equity linked savings scheme with a statutory lock-in period of 3 years and tax benefit replicating/ tracking Nifty LargeMidcap 250 Index.
The new fund offer or NFO of the scheme is open for subscription and it will close on November 3. The scheme will re-open for continuous sale and repurchase within five business days.
The scheme is benchmarked against Nifty LargeMidcap 250 Index TRI. The minimum application amount is Rs 500 and in multiples of Rs 500 thereafter.
The investment objective of the scheme is to invest in stocks comprising the Nifty LargeMidcap 250 Index in the same proportion as in the index to achieve returns equivalent to the Total Return Index of Nifty LargeMidcap 250 Index (subject to tracking error), while offering deduction on such investment made in the scheme under Section 80C of the Income-tax Act, 1961.
The scheme will adopt a passive investment strategy and will endeavour to invest in stocks in proportion to the weightage of the stocks in the Nifty LargeMidcap 250 Index. The investment strategy would revolve around reducing the tracking error to the least possible extent through regular rebalancing of the portfolio, taking into account the change in weights of stocks in the Index as well as the incremental collections/redemptions in the scheme. Such rebalancing shall be done in accordance with timelines prescribed by SEBI from time to time.
The schemes will be managed by Kedarnath Mirajkar.
Should you invest?
Should you invest in these NFOs? We typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, we believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don’t have any data when it comes to new offerings.
Zerodha Nifty LargeMidcap 250 Index Fund is categorised under Other Schemes – Index Funds. There is an existing scheme in this category – Edelweiss NIFTY Large Mid Cap 250 Index Fund. However, it doesn’t have a long history as the scheme was launched in December 2021.
Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund is a passive equity linked savings scheme. Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund is the only scheme under this category that is benchmarked against Nifty LargeMidcap 250 Index TRI. The other two passive ELSS funds – 360 One ELSS Nifty 50 Tax Saver Index Fund and Navi ELSS Tax Saver Nifty 50 Index Fund – are benchmarked against Nifty 50 – TRI. These schemes are relatively new.
