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Tuesday, May 30, 2023

HDFC Mutual Fund’s Smart Beta ETFs


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Mumbai: HDFC Asset Management Co Ltd, one of India’s leading mutual fund houses, said on Thursday it has launched HDFC NIFTY200 Momentum 30 ETF and HDFC NIFTY100 Low Volatility 30 ETF in order to expand their suite of HDFC MF Index Solutions.

Smart Beta investing involves stock selection and weighting based on factors, rather than size, as defined in the underlying index methodology by NSE Indices Ltd (NIFTY 50). These investment strategies endeavour to provide better risk-adjusted returns than broad market cap weighted indices.

The indices underlying the additional Smart Beta ETFs — HDFC NIFTY200 Momentum 30 ETF and HDFC NIFTY100 Low Volatility 30 ETF – have generated higher long-term returns than the NIFTY 200 TRI and the NIFTY 100 TRI respectively.

Both have generated higher average rolling returns over 1, 3, 5 and 10 year horizons compared to the NIFTY 200, 100 and 50 TRI.

Commenting on the launch, Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Co Ltd, said: “Smart Beta investing is popular globally with AUM rising steadily. HDFC AMC is happy to expand index solution offerings for investors that are backed by empirical research.

“Smart Beta ETFs offer one-shot diversification of portfolio at a low cost, and is a proven tool for investors who seek returns over the long-term. The fund house has 20 years of experience in managing passive funds, which comes with highly disciplined and robust Investment and Risk Management policies and processes.”

The NFO period for the two Smart Beta ETFs is from September 26 to October 6.

Investors can consider diversifying their investments across factors based on individual preferences, since performance of various factors changes across different market environments. With a minimum investment of Rs 500 per application and in multiples of INR Re 1 thereafter, HDFC MF offers an opportunity for investors to invest in both Smart Beta ETFs.

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