Groww Nifty 200 ETF FOF - Direct (G): NFO Details

resr 5paisa Research Team

Last Updated: 5th February 2025 - 06:32 pm

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Groww Nifty 200 ETF FOF is a fund of funds that will invest predominantly in units of Groww Nifty 200 ETF with Long-term capital appreciation and Exposure to Nifty 200 stocks. The investment objective of the Scheme is to generate long-term capital growth by investing in units of the Groww Nifty 200 ETF. 

Details of the NFO: Groww Nifty 200 ETF FOF - Direct (G)

NFO Details

Description

Fund Name

Groww Nifty 200 ETF FOF - Direct (G)

Fund Type

Open Ended

Category

Funds of Funds – Domestic (FOF)

NFO Open Date

07-February-2025

NFO End Date

21-February-2025

Minimum Investment Amount

500/- and in multiples of ₹1 thereafter

Entry Load

-Nil-

Exit Load

If redeemed within 30 days from the date of allotment: 1%

If redeemed after 30 days from the date of allotment: NIL.

Fund Manager

Mr. Abhishek Jain

Benchmark

Nifty 200 TRI

Investment Objective and Strategy

Objective:

The investment objective of the Scheme is to generate long-term capital growth by investing in units of the Groww Nifty 200 ETF. 

However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved. 

Investment Strategy:

The Scheme will invest in the units of Groww Nifty 200 ETF managed by Groww Mutual Fund as per the above stated asset allocation. The cumulative gross exposure to equity, derivatives, debt instruments and money market instruments will not exceed 100% of the net assets of the scheme in accordance with Clause 12.24 of SEBI Master Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024.

As per investment objective, the scheme will invest in units of Groww Nifty 200 ETF.  Investments made from the net assets of the Scheme would be in accordance with the investment objective of the Scheme and the provisions of the SEBI (MF) Regulations

Why Invest in Groww Nifty 200 ETF FOF - Direct (G)?

Key Reasons to Consider Investing:

Sectoral Growth Potential: India's defense sector is experiencing significant growth due to increased government focus on modernization, technological advancements, and initiatives like "Make in India." Investing in this fund provides an opportunity to benefit from the anticipated long-term expansion of this strategically important sector. 

Diversification: By investing in a diversified portfolio of defense-related companies, the fund spreads risk across multiple stocks within the sector. This approach reduces the impact of poor performance by any single company on the overall investment. 

Passive Investment Approach: The fund employs a passive investment strategy by replicating the performance of the Nifty India Defence Index. This method is generally more cost-effective than active management, resulting in lower expense ratios and providing investors with a straightforward way to gain exposure to the defense sector. 

Accessibility and Affordability: With a minimum investment requirement as low as ₹500, the fund is accessible to retail investors seeking exposure to a high-growth sector without committing significant capital.

Strength and Risks – Groww Nifty 200 ETF FOF - Direct (G)

Strengths:

Broad Market Exposure: The fund is categorized under "Fund of Funds" with a growth distribution type and an open-ended structure. This structure allows investors to gain exposure to a diversified portfolio, potentially enhancing returns while mitigating risks. 

Professional Management: Being a Fund of Funds, it invests in a variety of underlying funds managed by professional fund managers. This approach leverages the expertise of multiple managers, aiming for optimal asset allocation and performance.

Diversification: Investing in a Fund of Funds provides diversification across different asset classes and sectors, which can help in reducing the overall risk of the investment portfolio.

Accessibility: The open-ended structure of the fund allows investors to enter and exit the fund at their convenience, providing liquidity and flexibility in managing their investment.

Risks:

Market Risk: The fund's performance is directly linked to the Nifty 200 Index, which comprises the top 200 companies listed on the National Stock Exchange of India. Any downturn in the broader market or adverse economic conditions can negatively impact the fund's value.

Equity Risk: Being an equity-oriented fund, it is subject to volatility. Stock prices can fluctuate due to company-specific factors, industry developments, or macroeconomic trends, leading to potential capital loss.

Tracking Error: Since the fund invests in ETFs that aim to replicate the Nifty 200 Index, there might be minor discrepancies between the ETF's performance and the actual index due to factors like fund expenses or liquidity constraints.

Expense Ratio: Investing in a FoF structure means bearing the expense ratios of both the underlying ETFs and the FoF itself. These cumulative costs can erode overall returns over time.

Liquidity Risk: While the Nifty 200 Index includes large and mid-cap companies, certain stocks or ETFs within the portfolio might face liquidity issues, especially during volatile market conditions, potentially affecting the fund's ability to execute transactions efficiently.

Concentration Risk: If the fund's holdings are heavily weighted towards specific sectors or industries within the Nifty 200, poor performance in those sectors can disproportionately affect the fund's overall returns.

Regulatory Risk: Changes in government policies, tax regulations, or other regulatory frameworks can impact the operations and profitability of the companies within the Nifty 200 Index, thereby affecting the fund's performance.

Before making an investment decision, it's crucial to thoroughly review the fund's scheme documents, understand its investment strategy, and assess how it aligns with your financial goals and risk tolerance. 

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