However, investors please note that this is an Index Fund, not an ETF or Exchange Traded Fund. Hence, investors will have to rely upon the daily NAV or Net Asset Value calculation. One cannot trade on this index fund on a tick by tick basis, as is possible with ETF.
Also note the risk part. Just because an index is being followed, it does not mean good returns are guaranteed. The portfolio rebalancing frequency by fund managers plays a vital role in deciding the returns. If the fund portfolio is rebalanced at a long duration (say once in a month), then the fund manager may end up buying stocks at a high price and selling at a low price. If the mutual fund balancing happens frequently, there are lots of brokerage charges & transactional costs to be paid for each trade, which eats up the profits and hit the returns. Hence Investors should be aware of these risks. Other than that, there are charges for exit load which investors should be aware of. The details are as below:
So overall, this IDBI Nifty Junior Index Fund seems to be a focussed fund on mid cap sector.
Mr. Gautam Kaul will be the fund manager.
The money will be invested in the following proportions:
95% to 100% - Stocks & Derivatives in the CNX Nifty Junior Index
Rest 0-5% in domestic debt and money market instruments or cash
During NFO, the units of this Fund will cost Rs 10 per unit.
Are there any alternatives to IDBI Nifty Junior Index Fund?
You can look for a mid cap based ETF or Exchange Traded Fund which is benchmarked to any mid cap index. As mentioned in the aticle with Example Relative performace of mid-cap stocks v/s large-cap stocks, JuniorBees ETF from Benchmark funds is a good ETF which tracks the Nifty Junior inde and also offers the intraday trading opportunities.
The IDBI Nifty Junior Index Fund will be benchmarked to CNX Nifty Junior Index
Minimum Investment:
Purchases : Rs. 5,000/- and in multiple of Rs. 100 thereafter.
SIP or Systematic Investment Plan is available? - Yes
No Tax Benefit is available in the IDBI Nifty Junior Index Fund
Investment Options for IDBI Nifty Junior Index Fund :
- Growth Plan:
- Dividend (Payout and Reinvestment)
The entry load for IDBI Nifty Junior Index Fund is as follows:
Entry Load for IDBI Nifty Junior Index Fund :
Zero Entry Load
Exit Load for IDBI Nifty Junior Index Fund:
1% if the amount sought to be redeemed or switched out is invested up to 1 year from date of allocation.
Nil afterwards
Final Thoughts about the IDBI Nifty Junior Index Fund?
This fund can be a good investment for investors willing to bet on the mid cap sector and believe that the mid cap stocks of today can becoming the high return giving stocks of tomorrow. However, nothing is guaranteed. Frequency of rebalancing the fund portfolio and overall performance of the mid cap stocks will matter the most
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