Gain Exposure to Private Banking Sector with UTI Nifty Private Bank Index Fund
Sep 02, 2024
UTI Mutual Fund has launched UTI Nifty Private Bank Index Fund
It is an open-ended scheme replicating/ tracking Nifty Private Bank TRI
In a volatile market environment, private banks have demonstrated resilience due to their strong capital positions, superior asset quality, and ability to manage non-performing assets (NPAs) effectively. They are better equipped to navigate economic downturns, making them attractive to investors looking for stability amid uncertainty.
The Nifty Private Bank Index consists some of the most prominent and stable private banks, such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and IndusInd Bank, among others. These banks are known for their strong balance sheets, robust growth potential, and efficient management practices, which have positioned them as leaders in the Indian banking sector.
Give that, mutual funds mirroring the performance of Nifty Private Bank Index could be a strategic addition to an investor's portfolio, particularly in the current volatile market. It provides exposure to high-quality private banks with strong fundamentals, offering both stability and growth potential.
[Read: Is It Wise to Invest in Sector & Thematic Funds]
The Investment objective of the Scheme is to provide returns that, before expenses, corresponds to the total return 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.
Under normal circumstances, UTI Nifty Private Bank Index Fund will hold an allocation of 95% to 100% in Equity and Equity related Securities of companies constituting Nifty Private Bank Index and 0% to 5% in Debt / Money Market instruments including Triparty Repo on Government Securities or treasury bill and units of Liquid Mutual Fund.
UTI Nifty Private Bank Index Fund is a low-cost index Fund which tracks the Nifty Private Bank Index passively. The scheme endeavours to achieve return equivalent to underlying index while minimizing tracking error.
The investment strategy would revolve around reducing the tracking error to the least possible through regular rebalancing of the portfolio, taking into account the change in weights of stocks in the Index as well as the incremental collections/redemptions in the Scheme. A part of the funds may be invested in debt and money market instruments, to meet liquidity requirements. Since the Scheme is index fund, it will only invest in securities constituting the Underlying Index.
UTI Nifty Private Bank Index Fund is benchmarked against the Nifty Private Bank TRI
UTI Nifty Private Bank Index Fund will be managed by Mr Sharwan Kumar Goyal and Mr Ayush Jain.
UTI Nifty Private Bank Index Fund is open for subscription from September 02, 2024 to September 16, 2024. The fund will reopen for continuous sale and repurchase September 24, 2024.
The minimum subscription amount is Rs 5,000/- and in multiples of Re. 1 thereafter.
The fund offers Direct Plan and Regular Plan. Under each plan the fund offers Growth option and Income Distribution cum Capital Withdrawal.