Navi Mutual Fund has launched its first-ever index fund to track Nifty 500 Multicap 50:25:25 index. The new fund offer will close on July 30.
The multi-cap index offers investors an opportunity to gain diversified exposure across large, mid and small-cap companies in a fixed weight of 50 per cent in large cap and 25 per cent each in mid and small-cap segments. The allocation helps to mitigate risk by reducing concentration in any single market-cap category.
Compared to the Nifty 500 index, which has a large-cap allocation of about 72 per cent, the Nifty 500 Multicap provides significant exposure to mid and small-cap companies.
This helps investors the potential for higher growth prospects over the long term. The expense ratio will be the lowest compared to active funds in the multi-cap category.