Upcoming NFO: Mirae Asset Mutual Fund Files Draft for Mirae Asset Nifty NBFC ETF

Mirae Asset Mutual Fund has filed a draft Scheme Information Document for the Mirae Asset Nifty NBFC ETF. 

The proposed fund will be an open-ended exchange-traded fund that tracks the Nifty NBFC Total Return Index. Its objective is to generate returns, before expenses, in line with the index, subject to tracking error.  

Proposed Investment Structure 

The scheme is to invest between 95% and 100% of its total assets in securities forming part of the Nifty NBFC Index. Up to 5% of the portfolio may be held in money market instruments, debt securities or units of domestic debt and liquid mutual fund schemes.  

The ETF will follow a passive investment approach. It will hold stocks included in the Nifty NBFC Index in proportions similar to their respective weights, while portfolio changes will be made when the index composition or stock weightings are revised.  

Tracking the Benchmark 

The Nifty NBFC Total Return Index has been selected as the benchmark for the scheme. Under normal market conditions, the tracking error is not expected to exceed 2% per annum, calculated using daily rolling returns over a 12-month period.  

The portfolio will generally be rebalanced within seven calendar days if there is a change in index constituents or if the allocation moves outside the prescribed limits.  

The document notes that market volatility and other factors may result in tracking error exceeding the expected level.  

NFO and Trading Details 

The New Fund Offer (NFO) dates have not yet been disclosed. The offer must remain open for at least three working days and cannot extend beyond 15 days, including any extension. Units offered during the NFO will be priced at 1/10,000th of the Nifty NBFC Index value on the allotment date.  

Following the offer, the units are proposed to be listed on the NSE and BSE. Investors will be able to buy and sell units on the exchanges during trading hours, while large investors can directly transact with the AMC for amounts above ₹25 crore.  

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Conclusion 

The proposed ETF will track the Nifty NBFC Total Return Index, with most of its assets allocated to index securities. NFO dates remain undisclosed. 

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.