HDFC Launches New Fund: Invest in India's Top Sector Leaders with Just ₹100!

HDFC Mutual Fund has introduced a new investment product, the HDFC BSE India Sector Leaders Index Fund. This is an open-ended scheme designed to passively track and replicate the performance of the BSE India Sector Leaders Index (TRI). The New Fund Offer (NFO) period for investors to subscribe to this fund will close on November 21.

The fund aims to provide investors with exposure to leading companies from various sectors in India. It selects the top three companies based on their average six-month daily total market capitalization from each sector represented in the BSE 500 Index. This strategy ensures broad-based exposure to the Indian economy, focusing on companies demonstrating sectoral leadership.

Currently, the index covers over 20 sectors, including financial services, information technology, FMCG, automobiles, and healthcare. By investing across these diverse sectors, the fund helps reduce concentration risk while capitalizing on the strengths of established market players.

The fund will be managed by Nandita Menezes and Arun Agarwal. Investors can start their investment journey with a minimum of ₹100 during the NFO.

**Impact** This launch is significant for investors interested in passive investment strategies, a segment that has seen substantial growth due to its lower costs and diversification benefits. It offers a new, diversified avenue for retail and institutional investors looking to gain exposure to India's leading companies across various industries. The fund's success will depend on its ability to accurately track the index. Rating: 7/10.

**Difficult Terms** * **Open-ended scheme**: A mutual fund that is available for subscription and redemption on all business days, without a fixed maturity date. * **Replicate or track**: To follow the performance of a specific market index, aiming to achieve similar returns. * **BSE India Sector Leaders Index (TRI)**: A stock market index compiled by the Bombay Stock Exchange that tracks the performance of leading companies selected from various sectors of the Indian economy, including reinvested dividends (Total Return Index). * **New Fund Offer (NFO)**: The period during which a newly launched mutual fund scheme is open for investors to buy units. * **Market capitalisation**: The total value of a company's outstanding shares, calculated by multiplying the current share price by the total number of shares. * **Concentration risk**: The risk associated with an investment portfolio being heavily weighted towards a particular asset, sector, or geographic region, making it vulnerable to downturns in that specific area. * **Passive index fund**: A type of mutual fund that aims to mirror the performance of a specific market index, such as the BSE India Sector Leaders Index, rather than actively selecting stocks. * **SEBI regulations**: Rules and guidelines set by the Securities and Exchange Board of India, the regulatory body for the securities market in India.