HDFC Nifty Large Midcap 250 Index Fund launched: Should you invest in NFO?

HDFC Asset Management Co, the investment manager to HDFC Mutual Fund (HDFC MF), on Thursday launched the HDFC Nifty LargeMidcap 250 Index Fund, a passively managed fund that aims to track the Nifty LargeMidcap 250 Total Returns Index. The New Fund Offering (NFO) opens on September 20 2024 and closes on October 4, 2024. 

The scheme could be suitable for individuals seeking to capitalize on the long-term growth prospects of both large and mid-sized companies through a unified investment approach. This approach provides investors with a simplified way to maintain balanced exposure to both market segments through a single, passively managed fund.

The HDFC Nifty LargeMidcap 250 Index Fund provides investors with diversified exposure across large and midcaps through a single scheme. 

The Nifty LargeMidcap 250 Index comprises all stocks from the Nifty 100 Index and Nifty Midcap 150 Index, with equal weightage to large caps and midcaps at 50% each. The weights to each segment are reset every quarter, allowing investors to maintain a 50:50 allocation to large cap and midcap stocks in a convenient and tax-efficient manner over the long term. 

• The new fund will be managed by  Nirman Morakhia and  Arun Agarwal. 
• Investors may participate with a minimum investment of Rs. 100 during both the New Fund Offer (NFO) period and the continuous offer period, which commences after the scheme reopens for purchase and sale. 
• There is no maximum limit on the investment amount, and the final unit allotment will be subject to the deduction of applicable stamp duty and transaction charges, where applicable.

 " With over two decades of expertise in Index Solutions, we are pleased to introduce the HDFC Nifty LargeMidcap 250 Index Fund. This scheme provides investors with a unique opportunity to participate in India’s growth story by offering exposure to both large and midcap stocks in a single product. By maintaining a 50:50 allocation, investors can benefit from the stability of large, established companies while capitalizing on the growth potential of emerging ones. We believe this strategy will be suitable to investors looking for a diversified and efficient way to access India's dynamic equity market," said  Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Company Limited.

Why invest in the fund?

• It provides broad market exposure by investing in 250 stocks, offering diversified exposure across size segments and sectors. 
• The fund maintains a balanced allocation with a 50:50 split between largecaps and midcaps segments, which is reset quarterly. 
• This single product offers investors convenient exposure to both market cap segments through one investment. The quarterly resets ensure tax-efficient rebalancing, maintaining the desired allocation without triggering taxable events for investors.