Reliance Nippon Life Asset Management has filed a draft paper with market regulator SEBI for Reliance ETF Nifty Midcap 150, an open-ended index exchange-traded fund.

The scheme will investment in equity and equity-related securities and portfolios replicating the composition of Nifty Midcap 150 Index, subject to tracking errors. The ETF will invest 95-100 per cent in securities constituting Nifty Midcap 150 Index, while 0-5 per cent would be allocated to money market instruments (with maturity not exceeding 91 days), including CBLO, cash and cash equivalents.

Nifty Midcap 150 index represents the next 150 companies (companies ranked 101-250) based on full market capitalisation from Nifty 500.

The face value of each unit of the scheme will be ₹10 and the value of each unit would approximately be equal to the value of 1/100th of the value of the Nifty Midcap 150 Index. The fund house aims to garner at least ₹10 crore for the scheme. The minimum application amount is ₹5,000 in multiples of ₹1 thereafter. The ETF will be listed on the NSE.

For the time duration of change in the index constituents, the scheme may have to invest in derivatives to maintain the respective weightages for the companies. Other than for purposes of portfolio rebalancing, the scheme will not invest in derivatives.

The fund is ideal for those investors who would like to participate in the India growth story by passively investing in a well-diversified portfolio of well-known firms as represented by the Nifty Midcap 150 Index.

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