SBI ETF SENSEX Next 50 NFO Review: Good Filler to your Portfolio?

With the surge in New Fund Offers during the last 6 months, there are many sectors and indices being tapped on the basis of their improved performances. The SBI – ETF Sensex Next 50 NFO is one such offer. Next 50 in this index denote the next top 50 stocks after the largest 50 stocks in the core of the Sensex index, by market capitalization.

This is an open-ended ETF scheme tracking this index to mirror the performance of the S&P Sensex Next 50 owing to its stellar performance in the last year which stood at 5.32 % and the last 5 years performance of 18.92% annualized returns as on August 31, 2018.

TOP 10 BY INDEX WEIGHT

CONSTITUENT

SYMBOL

1	Bajaj Finserv Ltd	532978
2	JSW Steel Ltd	500228
3	Britannia Industries Ltd.	500825
4	Piramal Enterprises Ltd	500302
5	Dabur India Ltd	500096
6	UPL Ltd	512070
7	Motherson Sumi Systems Ltd	517334
8	Bosch Ltd	500530
9	Aurobindo Pharma Ltd	524804
10	Page Industries Ltd	532827

Source: Asiaindex.co.in

SBI – ETF SENSEX Next 50 NFO Details

The fund will invest 95% in the allocation of the Sensex Next 50 and 5% in money market instruments. Money market instruments are to have room for liquidity. Also, during the time of portfolio rebalancing, there might be few investments in derivatives for a short while but the exposure to both money market and gross notional exposure of derivative instruments will not exceed 100% of the net assets of the scheme.

• NFO Open Date: September 5, 2018, to September 10, 2018.
• Unit value at Rs 10 for purchase and will be issued at a premium, if any, approximately equal to the difference between face value and allotment price.
• Units will be available for sale & purchase from or before September 26, 2018.
• Minimum application amount is Rs 5,000 and
• AMC seeks to raise a Corpus of Rs 10 crores under this scheme.

Risk Profile

Since the stocks of this index have a derivative trade as well, the risk measure of this scheme has been kept as “Moderately High” by the fund house. Usually, ETFs have a low to medium risk profile as they are passively managed and follow the portfolio allocation of an index, in this case, the SENSEX Next 50.

Fund Manager Expertise

The fund will be managed by Mr. Ravi Prakash Sharma who is also currently managing SBI –ETF Nifty Bank, SBI Nifty Index Fund, SBI Gold Fund and other such passive funds of SBI. Other passive funds of SBI have been giving sustainable returns to the investors and SBI hope to follow it up after the SBI – ETF NIFTY Next 50. The AMC expects up to 1.50% as various expenses in the investment management, audit and various other administration fees.

How to Invest?

An investor can participate by investing through his mutual fund accounts within bank accounts, demat, directly with the mutual fund house on their website or through their demat on the exchange.