Mirae Asset BSE 200 Equal Weight ETF Fund of Fund - Direct (G): NFO Details

Investment Objective and Strategy

Objective:

The investment objective of Mirae Asset BSE 200 Equal Weight ETF Fund of Fund - Direct (G) is to generate returns, before expenses, that are commensurate with the performance of the BSE 200 Equal Weight Index, subject to tracking error. The Scheme does not guarantee or assure any returns. 

There is no assurance that the investment objective of the scheme will be achieved.

Investment Strategy:

The fund employs a passive investment strategy designed to mirror the performance of the BSE 200 Equal Weight Index. Instead of directly holding individual stocks, it invests in an underlying ETF that tracks this index, ensuring that each of the 200 constituent stocks receives an equal allocation. This equal-weight approach reduces concentration risk, as no single stock dominates the portfolio, and provides balanced exposure across various sectors of the Indian economy. Overall, the strategy aims to offer diversified market participation with cost-efficient and transparent exposure to India's leading companies.

Why Invest in Mirae Asset BSE 200 Equal Weight ETF Fund of Fund - Direct (G)?

Diversification: It offers broad exposure to 200 leading Indian companies, spreading risk across multiple sectors.

Equal Weighting: Each constituent stock is given the same importance, reducing the risk of over-concentration in a few large companies.

Cost Efficiency & Transparency: The passive fund-of-funds approach often results in lower management fees and clear tracking of the underlying index.

Simplicity: Investors gain access to a balanced portfolio without the need to manage individual stock selections.

Strength and Risks – Mirae Asset BSE 200 Equal Weight ETF Fund of Fund - Direct (G)

Strengths:

Diversified Exposure: Provides access to 200 leading Indian companies, spreading risk across various sectors of the economy.

Equal Weighting Approach: Ensures balanced participation by assigning equal importance to each stock, which mitigates concentration risk and allows smaller companies to contribute significantly.

Cost Efficiency: Its passive fund-of-funds structure often results in lower management fees compared to actively managed portfolios.

Transparency: The fund closely tracks the BSE 200 Equal Weight Index, offering clarity in its performance and investment strategy.

Simplicity: Investors gain straightforward exposure to a diversified equity portfolio without the need to select individual stocks.

Risks:

Market Volatility: The fund mirrors a broad market index, meaning it is directly affected by market fluctuations and economic cycles.

Tracking Error: As the fund invests in an underlying ETF to replicate the index, differences in performance—known as tracking error—can occur due to fees, rebalancing, or liquidity issues.

Fund-of-Funds Structure: The additional layer of investment may lead to extra costs and complexity, which can slightly detract from overall performance compared to directly investing in the ETF.

Equal Weighting Implications: While equal weighting reduces over-concentration in large-cap stocks, it can increase exposure to smaller or less liquid companies, potentially introducing additional volatility.

Sector and Stock-Specific Risks: Even with broad diversification, adverse developments affecting specific sectors or individual companies can impact the fund's performance.