UTI Mutual Fund (UTI) today launched a new open ended equity oriented Exchange Traded Fund, ‘UTI Nifty Next 50 Exchange Traded Fund’ (UTI Nifty Next 50 ETF). The New Fund Offer opens on July 18, 2017 and will close on July 28, 2017. The scheme will be available for ongoing purchase, redemption and trading in cash market segment of NSE and BSE from August 8, 2017
The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error. However there is no guarantee or assurance that the investment objective of the scheme will be achieved.
Exchange Traded Funds (ETFs) are innovative products that provide exposure to an index or a basket of securities that trade on the exchange like a single stock. ETFs can be bought and sold on the exchange at traded prices on intra-day basis. ETFs are mostly, passively managed index funds that replicate the stipulated index.
UTI Nifty Next 50 ETF will invest in securities which are constituents of Nifty Next 50 Index and in Cash/Money Market Instruments including CBLO and Units of Liquid Mutual Fund in accordance with the asset allocation pattern.
The NIFTY Next 50 Index represents 50 companies from NIFTY 100 index after excluding the NIFTY 50 companies. These are established companies and are amongst the top companies in their respective sectors. Many times it is observed that stocks initially becomes part of Nifty Next 50, grows here and eventually become part of Nifty 50.
Mr Kaushik Basu, Fund Manager of UTI Nifty Next 50 ETF said “The scheme will track Nifty Next 50 Index and will use a passive or indexing approach to endeavour to achieve the scheme’s investment objective.”
Mr Suraj Kaeley, Group President (Sales and Marketing), UTI AMC said, “ETFs are highly flexible and can be used as a tool for gaining instant exposure to equity markets. UTI Nifty Next 50 ETF has a number of benefits such as diversification, low cost and transparency. Investors can invest in a diversified portfolio representative of broad Indian economy and create a long term ‘Core’ holding in their portfolio.”
“Currently UTI has UTI Nifty ETF, UTI Nifty Index Fund and UTI Sensex ETF under its passive product basket. Launch of UTI Nifty Next 50 ETF will further help UTI in strengthening its passive product offerings.”