Nippon India Nifty Smallcap 250 Index Fund NFO

 Nippon India Nifty Smallcap 250 Index Fund NFO.

Nippon India Mutual Fund has launched Nifty Smallcap 250 Index Fund. 

Nifty Smallcap 250 Index includes 250 stocks after excluding constituent of Nifty 100 and Nifty
Midcap 150 Index from composition of Nifty 500 Index (i.e. stocks ranked 251 to 500 by full market
capitalization). The index is designed to measure the performance of Smallcap universe.

New Fund Offer Info:

  • New Fund Offer Opens:  September 28, 2020.
  • New Fund Offer Closes: October 09, 2020.
  • Benchmark – Nifty Smallcap 250 TR Index.
  • Minimum Investment – Lumpsum - Minimum Rs.5000/- and in multiples of Rs 1/- thereafter.
  • Total Expense Ratio – Direct - upto 1%, exact number will be updated.
  • Entry Load – Nil.
  • Exit Load –Nil.


The scheme will invest predominantly in stocks constituting the underlying index in approximately the same weight they represent in the index.

Top Holdings:

Performance:

Small Cap Index Fund

Index funds are a great way to participate in equity markets with mimimum effort and at low cost. For the past 3 years, the rally in the stock market has largely been driven by  largecap companies/ largecap index Nifty 50,  while the broader market that includes midcap and smallcap segment is still struggling with subdued returns.

As you can see from the historical returns image above, the small cap index has higher volatility and drawdown, true to its label. The 3-Year and 5-Year rolling returns are better than large cap index fund returns,  but it comes with a higher risk.

To conclude, large cap Index Funds like Nifty 50 should be the core allocation in the portfolio and other index funds like Smallcap or Midcap allocation should be relatively smaller in one's portfolio.