UTI Mutual Fund launches Nifty Midcap 150 Quality 50 Index Fund

The New Fund Offer (NFO) opened on March 28 and will close on April 5. The scheme will re-open for subscription and redemption on an ongoing basis from April 15.

Sharvan Kumar Goel, Head-Passive, Arbitrage and Quant Strategy, UTI AMC, will be the fund manager for the scheme.

Goyal commented on the launch, “Nifty Midcap 150 Quality 50 Index provides a diversified exposure at the stock level and the maximum weightage assigned to each stock is 5% or less than 5 times the weight of the stock in the Nifty Midcap 150 Index.”

“UTI Nifty Midcap 150 Quality 50 Index Fund is a low cost smart beta index fund which passively tracks Nifty Midcap 150 Quality 50 Index. Our newly introduced scheme is based on the returns of the underlying index while minimizing the tracking error. Will try to get equal returns.” she added.

According to the fund house, UTI Nifty Midcap 150 Quality 50 Index Fund is suitable for investors who wish to invest in the midcap segment while investing in relatively quality businesses that can generate economic value.

Minimum initial investment is 5,000, and thereafter in multiples of Rs. The minimum investment under a folio is 1,000, and thereafter in multiples of Rs.1 without any upper limit.

There will be zero exit load on the scheme.

According to index provider, NSE Index, the Nifty Midcap 150 Quality 50 Index comprises the top 50 companies from its parent Nifty Midcap 150 Index, selected on the basis of their ‘quality’ scores.

The Quality Score for each company is determined on the basis of equity, financial leverage (excluding financial services companies) and earnings per share (EPS) growth variability of each stock analyzed during the last 5 financial years.

The weighting of each stock in the index is based on a combination of the stock’s Quality Score and its free-float market capitalization.