IDFC Mutual Fund has announced the launch of IDFC Nifty Fund. It is an open ended index-linked Equity fund.
This is the first index fund to be launched by the fund house. The assets of this fund will be invested in all the stocks constituting the S&P CNX Nifty Index in the same wieghtage in which they are represented in the Index. The fund can also allocate 10 per cent of its assets to debt.
The fund offers both growth and dividend options.
The fund will be managed by Tridib Pathak, who has 19 years of experience in functions including term lending, credit rating, equity research and fund management.
This is the 15th index fund in the Mutual Fund industry which tracks the Nifty while eight others track the BSE Sensex. The range of tracking error of index funds which track S&P CNX Nifty is from 0.34 per cent to 1.51 per cent.
Tracking error is the difference in returns between a fund and its benchmark. The difference may be created due to various expenses such as marketing, advertising, office administration, brokerage and others.
The New Fund Offer (NFO) opens on April 12, 2010 and closes on April 23, 2010. The minimum application amount will be Rs 500. No exit load will be applicable.