NFO Alert: Groww Mutual Fund launches the Nifty Total Market Index Fund; all you need to know

Groww Mutual Fund announced the launch of the Groww Nifty Total Market Index Fund. The scheme opened for public subscription on October 03, 2023, and will close on October 17, 2023.

Q. What kind of mutual fund scheme is this?

This is an open-ended scheme tracking the Nifty Total Market Index.

The Nifty Total Market Index consists of around 750 stocks across large, mid, and small-cap segments. While large-cap stocks account for 72.03 per cent of their weightage, about 27.97 per cent are attributed to mid, small, and microcap stocks of their weightage in the index. This composition seeks to balance the steadiness of large-cap companies with the growth prospects of mid and small ones. The index represents around 96 per cent of the NSE's total market capitalisation, in comparison to the 49 per cent covered by the Nifty 50. This broad coverage paints a holistic picture of India's stock market.

In addition, its diversified nature minimises risks tied to individual sectors. Historically, this index has outperformed the Nifty 50 in terms of both total and risk-adjusted returns, and its ten-year drawdowns are comparable to those of the Nifty 50 Index.

This product is suitable for investors seeking

• Returns commensurate with the performance of the Nifty Total Market Index - TRI, subject to tracking error.
• Investors looking to invest in India’s growth potential and across sectors & market caps in order to benefit from a well-diversified portfolio with long-term capital appreciation.

Q. What is the main objective of investing in this fund?

The investment objective of the scheme is to achieve a return equivalent to the Nifty Total Market Index-TRI subject to tracking error. This index is diversified throughout the Indian market across sectors and market caps and aims to benefit from India’s economic growth. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns.

Harsh Jain, COO and Co-Founder, Groww, highlighted, “India's economic story is multi-dimensional, with growth seen across diverse sectors. The Groww NIFTY Total Market Index Fund seeks to offer investors an opportunity to benefit from India’s growth.”

How may one invest in this scheme?

The scheme shall invest in the following securities as per the limits specified in the scheme, subject to SEBI (MF) Regulations. The scheme would invest in stocks constituting the Nifty Total Market Index in a similar proportion (weightage) as in the Index and endeavour to track the benchmark index.

Are there similar mutual funds in the market?

To date, no asset management company (AMC) has launched any such index fund scheme.

How will the scheme benchmark its performance?

The performance of the scheme shall be benchmarked to Nifty Total Market Index - TRI. Since the scheme is an index fund, the compositions are such that it is most suited for comparing the performance of the scheme.

The Nifty Total Market Index - TRI will track the performance of 750 stocks covering large, mid, small, and microcap segments. All stocks that are part of the Nifty 500 index and Nifty Microcap 250 index form part of the Nifty Total Market index-TRI. The weight of the stocks in the index is based on their free-float market capitalisation.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be“Nil”.

Who will manage this scheme?

Anupam Tiwari is the designated fund manager of this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.