NFO Period: May 23 to June 6, 2011.
Why ETFs?: An ETF is an open-ended Mutual Fund which trades like a stock, the underlying composition is a basket of securities. Most ETFs are like an index fund that track a particular index, viz. S&P CNX Nifty. Globally, ETFs have grown in size, with a current size of $1542 bn (as on Feb 2011).
Benefits for investors:
Over a 5-year period, 64% of large cap funds have underperformed the S&P CNX Nifty. Investors can benefit by directly investing into the benchmark index.
Index ETFs present a low-cost option. (Average Expense Ratio of 0.63% p.a. for ETFs as compared to 2.12% for Large Cap Funds)
More Transparency – ETFs track the underlying index, so the investor is aware where his money is being invested
More Trading Flexibility – ETFs are priced throughout the day and can be bought and sold on the exchange, where they are listed ETFs can be bought or sold in as little as 1 unit multiples
Why Nifty?: The S&P CNX Nifty represents 50 of India’s premier blue-chip companies, which are well-diversified across sectors – it is a direct play on the India Growth Story. Companies part of the index are the most liquid Indian equity securities traded on the National Stock Exchange, comprising 64.38% of the free float market capitalization.
Religare Nifty ETF is an Exchange-Traded Fund that will invest in securities which are constituents of S&P CNX Nifty Index in the same weight as in the underlying index. The Fund is designed to generate returns that closely correspond to the returns generated by the securities represented by the S&P Nifty Index, subject to tracking error, if any. The fund will follow a passive investment strategy - endeavour to track the benchmark index with as low tracking error as possible. It is a low cost option to invest in the Index, which trades like a share.
Religare Nifty ETF – Key Features
- During NFO – Investors can directly buy from the Fund House.
- Post NFO – Units will be listed on National Stock Exchange. Investors can buy, sell through their normal brokerage accounts.
- Low on cost compared to index funds.
- Not limited to Secondary Market Trading at NSE.
- Large Investors and Authorised Participants can create and redeem in lots of 10,000 units directly with the Fund House.
- Holdings and NAV of Religare Nifty ETF available on a real time basis and can be tracked at www.religaremf.com.
Who should invest?
Investors who want to keep investments simple, buy the market (invest in the top 50 quality companies) and keep the costs low.
Investors who believe in passive investment strategy and are looking for selective diversification.
Please find enclosed Religare Nifty ETF KIM cum Application Form & One Pager for your kind perusal.For any support or assistance, you may call Religare Mutual Fund Relationship Manager or visit our website at www.religaremf.com