A new equity or stock based mutual fund is going to enter the Indian markets. The fund belongs to IDBI mutual fund house and is called the IDBI India Top 100 Equity Fund. As the name suggests, this fund will keep its focus on the top 100 stocks as per the market cap, hence this is primarily a large cap focussed fund.
In this article, we will analyze how good is this IDBI India Top 100 Equity Fund NFO, whether this IDBI India Top 100 Equity Fund offers anything new or unique for the investors and whether the investors should invest in IDBI India Top 100 Equity Fund.
IDBI India Top 100 Equity Fund NFO: Review Analysis & Details
Let's begin with some basic details about IDBI India Top 100 Equity Fund.What are the NFO dates for IDBI India Top 100 Equity Fund?
Image sourced as screenshot from official idbi mutual fund site
The NFO period for IDBI India Top 100 Equity Fund is from April 25, 2012 to May 09, 2012. After the NFO period, the regular buying, selling and redemption of fund units will start from May 22, 2012.
What is so unique about this IDBI India Top 100 Equity Fund?
If this has to be answered in simple terms, there is nothing unique in this offering. Just another mutual fund which will try to track the performance of the top 100 stocks being traded on NSE. So basically, it is boiling down to being a large cap fund where the fund manager will try to replicate the performance of the "CNX 100 Index" which contains top 100 stocks on NSE. The fund managers will select among those top 100 stocks (but may not be limited to them) and try to generate returns similar to "CNX 100 Index". Obviously the tracking error will come in and after charges the returns will vary for the end investor. So overall, this is another large cap focussed mutual fund by IDBI.
In the past as well, IDBI has come up with many funds as follows:
- IDBI Nifty Index Fund
- IDBI Nifty Junior Index Fund
- IDFC Small Cap Equity Fund
As one can observe, most of the funds from IDFC are market-size specific - either focussing on large caps, mid caps or small cap stock profiles.
What are the other competitor products available in comparison to IDBI India Top 100 Equity Fund?
There are literally hundreds of mutual funds available. Add it them the list of ETF (Exchange Traded Funds) and Index Funds, the no. will shoot even higher. See List of All Mutual Fund and NFO Articles here
However, there can be more similar products offerings from other fund houses as that list is not complete.
What are the risks of investing and trading IDBI India Top 100 Equity Fund?
Basically, any investor who is looking for investing in top 100 market cap stocks of NSE through the mutual fund route can invest in this mutual fund from IDBI. However, the risk is obviously there.
As an investor of thi mutual fund, you will be taking a risk on the performance of this fund which may not necessarily be replicating the top 100 stock index. There is dependency on fund managers stock selection (which is inherent in any mutual fund investment).
Then, the overall stock market risk is always there. What if the stock market collapses during your period of investment in this fund.
These inherent risks are to be taken by the investor.
Final Thoughts about IDBI India Top 100 Equity Fund?
Another large cap focussed fund from IDBI adding to the already available large cap mutual funds.
See List of All Mutual Fund and NFO Articles here
During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5000 and in multiples of Re 1 afterwards.
Tax benefit will NOT be available in IDBI India Top 100 Equity Fund.
There will be 2 plans for investors to choose from:
Multiple options available for investments:
Growth Option
Dividend Option - Payout, Reinvestment facilities
IDBI India Top 100 Equity Fund Entry Load:
IDBI India Top 100 Equity Fund Exit Load: 1% for exit (repurchase/switch-out/SWP) on or before 1 year from the date of allotment.
NIL beyond 1 year.
Asse Allocation:
Equities and equity related instruments of constituents of the CNX 100 Index - 70% to 100%
Debt and Money market instruments - 0% to 30%
SIP or systematic investment plan? Yes Available.
Monthly SIP Option: Rs. 500 and in multiples of Re. 1/- thereafter, per month, for atleast 12 months or Rs. 1000 and in multiples of Re. 1/- thereafter, per month, for a minimum period of six months.
Quarterly SIP Option: Rs. 1500 and in multiples of Re. 1/- thereafter, per quarter, for a minimum period of four quarters.
The benchmark for IDBI India Top 100 Equity Fund will be CNX 100 Index
Mr. V. Balasubramanian will be the fund manager for IDBI India Top 100 Equity Fund.
