HDFC Mutual Fund Launches Nifty Metal ETF and ETF Fund of Fund; NFO Open till July 24, 2026

HDFC Mutual Fund has launched two new passive investment products: the HDFC Nifty Metal ETF and the HDFC Nifty Metal ETF Fund of Fund (FOF). They intend to provide investors with targeted exposure to India's metals and mining sector. 

Both schemes are designed to track the Nifty Metal Index Total Return Index (TRI), offering exposure to companies across steel, aluminium, copper, zinc, and other metal-related businesses.

The New Fund Offer (NFO) for the HDFC Nifty Metal ETF opened on July 20 and will close on July 24, while the NFO for the HDFC Nifty Metal ETF Fund of Fund will remain open until August 3, 2026.

HDFC Nifty Metal ETF and FOF: Investment Strategy

The HDFC Nifty Metal ETF aims to replicate the performance of the Nifty Metal Index TRI, subject to tracking error. The index comprises companies operating across various segments of the metals and mining industry.

Meanwhile, the HDFC Nifty Metal ETF Fund of Fund will primarily invest in units of the HDFC Nifty Metal ETF. Unlike the ETF, the FOF allows investors to gain exposure to the metals sector without requiring a demat or trading account, making it a suitable option for investors who prefer investing through the mutual fund route.

According to the fund house, the schemes seek to benefit from long-term growth drivers such as infrastructure development, manufacturing expansion, renewable energy, electric vehicles, and increasing demand for data centres.

NFO Details and Risk Factors

The minimum investment amount during the NFO period is ₹500 for the HDFC Nifty Metal ETF and ₹100 for the HDFC Nifty Metal ETF Fund of Fund.

The ETF carries no entry or exit load. The FOF also has no entry load but will levy a 1% exit load if units are redeemed or switched within 15 days of allotment. No exit load will apply after this period.

The HDFC Nifty Metal ETF will be managed by Abhishek Mor and Arun Agarwal, while Nandita Menezes and Arun Agarwal will manage the Fund of Fund.

As sector-focused schemes, both funds are subject to higher concentration risk than diversified equity funds, with returns closely linked to trends in metal prices, global demand, input costs, currency movements, and government policies.

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Conclusion

The launch of the HDFC Nifty Metal ETF and ETF Fund of Fund expands the range of passive investment options available to investors seeking exposure to India's metals sector. While the ETF is suited for investors who already invest through a demat account, the Fund of Fund offers a convenient alternative for those looking to participate in the sector without opening one. As with all thematic funds, investors should evaluate the sector's cyclical nature and align such investments with their overall portfolio objectives.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.