Page 16 - Banking Finance August 2023

MUTUAL FUND

The scheme will be benchmarked also have to put in place a disclosure Edelweiss MFs schemes changed their
against S&P BSE 500 TRI. framework. expense ratio in below index funds
with immediate effect - Edelweiss Nifty
It will be managed by Nimesh Chandan, The five new categories are -- exclu-
50 Index Fund - Direct Plan 0.05%,
Sorbh Gupta (Equity Portion) and sions, integration, best-in-class and
Edelweiss Nifty Next 50 Index Fund -
Siddharth Chaudhary (Debt Portion). positive screening, impact investing
Direct Plan 0.09%, Edelweiss Nifty
The minimum application amount for and sustainable objectives. Currently,
Midcap 150 Momentum 50 Index Fund
lumpsum investment is Rs 500 and in mutual funds can launch only one ESG
-0.14%, Edelweiss Nifty Smallcap 250
multiples of Re 1. For a systematic in- scheme under the thematic category
Index Fund -0.14%, Edelweiss NIFTY
vestment plan, the minimum invest- of equity schemes.
Large Mid Cap 250 Index Fund -0.14%,
ment amount can be from Rs 500 up
These measures will facilitate green fi-
to Rs 1,000 (minimum 60 instalments) and Edelweiss Nifty 100 Quality 30 In-
nancing with a thrust on enhanced dis-
dex Fund -0.14%. This strategic deci-
and above Rs 1,000 (minimum 6
closures and mitigation of greenwashin,
sion by Edelweiss Mutual Fund, known
instalments).
the regulator said in a circular. The pro-
for its innovative and low-cost offer-
vision of a new category for ESG
ings, reinforces its commitment to pro-
UTI Mutual Fund launches schemes will be applicable with imme-
vide good passive solutions to investors.
UTI Balanced Advantage diate effect, the Sebi said.
With regards to disclosure require-
Fund Loans against mutual
ments for ESG schemes, Sebi said mu-
UTI Mutual Fund has launched UTI funds catch fancy with
tual funds will have to clearly disclose
Balanced Advantage Fund, an open-
the name of the ESG strategy in the easy process, low rates
ended dynamic asset allocation fund,
name of the concerned ESG fund.
investing in a diversified portfolio of As mutual fund schemes form a size-
equity and fixed income. The portfolio able portion of an individual's invest-
Edelweiss Mutual Fund
of the scheme will be dynamically man- ment portfolio, various lenders are in-
aged, based on valuation and funda- becomes lowest cost index creasingly offering loans with these
mentals driven by in-house proprietary products as collateral. While lenders
fund provider
asset allocation model. have eased the process of accessing
Edelweiss Mutual Fund has made a sig-
such loans, they have kept the borrow-
The scheme aims to provide long-term
nificant move to benefit passive inves- ing rates lower compared to personal
capital appreciation and income by in-
tors by reducing the expense ratio or gold loans.
vesting in a dynamically managed port-
across its passive equity index schemes
folio of equity and debt instruments. Though public and private sector banks
in direct plans. The expense ratio has
offer this product, non-banking finance
However, there can be no assurance been cut to a record-low of 0.05 per-
companies (NBFCs) have been more
that the investment objective of the cent, the lowest among Nifty 50 index
aggressive. The selling pitch for loans
scheme will be achieved. The scheme funds in India. This reduction aims to
against mutual funds is that you do not
does not guarantee/ indicate any re- boost investor returns and minimize
have to liquidate your performing
turns. tracking errors for passive funds. The
schemes for want of short-term funds.
expense ratio reduction is expected to
Mutual funds can launch bring down tracking error and tracking In the case of equity mutual funds, in-
difference, which is the difference be- dividuals can get a loan up to a maxi-
five new categories under
tween the returns of the fund and the mum of 50% of the scheme value.
ESG scheme: Sebi benchmark index it aims to replicate. NBFCs have been offering such loans at
Sebi allowed mutual funds to introduce This shall help these low cost passive an interest rate of 9% to 10% based on
five new categories under ESG (envi- funds stay closer to their benchmark the credit score. In comparison, rates
ronmental, social and governance) performance, giving investors more on loans against gold are at 9% to
scheme. According to the capital mar- accurate exposure to the index they 24%, while individuals must shell out
kets regulator, the mutual funds will are tracking. 10-18% for personal loans.
16 | 2023 | AUGUST | BANKING FINANCE