HDFC Nifty 1D Rate Liquid ETF Switches to Growth Option

HDFC Mutual Fund is making changes to its HDFC Nifty 1D Rate Liquid ETF, with the Income Distribution cum Capital Withdrawal (IDCW) option being converted into a Growth option. From February 28, 2025, the IDCW option will no longer exist, and the scheme will be renamed HDFC Nifty 1D Rate Liquid ETF – Growth.

Redemption Window for Investors

Investors who do not wish to stay invested after the change can redeem their units without paying an exit load between January 29 and February 27, 2025. This redemption period provides flexibility to those who prefer the IDCW option and do not want to transition to the Growth plan.

Why the Change?

The HDFC Asset Management Company (AMC) has stated that moving to the Growth option will improve operational efficiency. The Growth option is expected to simplify fund management and help control scheme expenses, though no direct financial impact on investors has been highlighted.

Fund Overview

The HDFC Nifty 1D Rate Liquid ETF is an open-ended scheme launched on August 24, 2023, by HDFC Mutual Fund. It is designed to track the NIFTY 1D Rate Index, making it a low-risk option for investors seeking stable returns.

Here are the details:

• Assets Under Management (AUM): ₹72 crore (as of December 31, 2024)
• Expense Ratio: 0.50% (as of December 31, 2024)
• Riskometer: Low
• Minimum Investment: ₹5,000

What Investors Need to Know

For existing investors, the switch to the Growth option means there will no longer be any payouts from the scheme. Instead, earnings will be reinvested into the fund, potentially increasing the NAV over time.

The fund remains suitable for investors looking for low-risk exposure, but it’s essential to evaluate whether the new Growth option aligns with individual financial goals. For further details, investors can refer to the AMC’s official communication.

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. 

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