Upcoming NFO: Edelweiss Mutual Fund Filed Draft for Nifty Next 50 ETF with SEBI

Edelweiss Mutual Fund has filed a draft document for a new exchange-traded fund that will track the Nifty Next 50 Total Return Index. The scheme, called Edelweiss Nifty Next 50 ETF, falls under the “Very High” risk category, the same as its benchmark.  

What the Fund Plans to Do 

The stated aim is to follow the Nifty Next 50 TRI as closely as possible. Returns will depend on how the index performs, and the document notes there is no guarantee of achieving the objective. The fund will not take active calls on stocks and will replicate the index companies in similar proportions.  

Where the Money Will Be Invested 

The draft shows that 95%-100% of the portfolio will be in companies included in the Nifty Next 50 TRI, with up to 5% kept in money market instruments or cash equivalents for liquidity needs.  

It may use equity derivatives linked to index stocks for short periods, mainly during rebalancing or when securities are temporarily unavailable. This usage can go up to 20% of the equity portion and must be reversed within seven calendar days.  

Minimum Investment and Trading 

During the New Fund Offer (NFO), the minimum application amount is ₹5,000, with no cap on the maximum. After the listing, units can be bought and sold on the NSE and BSE like any other listed security, with a minimum of one unit per trade.  

Direct creation or redemption with the fund house will require a minimum transaction of ₹25 crore for large investors.  

Costs and Load 

There will be no exit load, although brokerage costs will apply if units are traded on stock exchanges. Scheme expenses are estimated at up to 1% of daily net assets, and stamp duty at 0.005% will be deducted on purchase transactions.  

Read More: NFO Alert: DSP Mutual Fund Launches FMP Series 277 Debt Fund! 

Conclusion 

The draft outlines a passive fund designed to mirror the Nifty Next 50 TRI, with most of its assets tied to companies ranked just below the Nifty 50, and limited room for deviation from the index. 

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