HDFC Nifty100 Quality 30 Index Fund – Direct (G) : NFO Details

The HDFC Nifty100 Quality 30 Index Fund – Direct Plan is an open-ended equity fund categorized under Large Cap, targeting investors seeking returns aligned with the Nifty100 Quality 30 Index (TRI), subject to tracking error. The fund is open for subscription from January 31, 2025, to February 14, 2025, with a minimum investment of ₹100. The fund carries a "Very High" risk rating and comes with no lock-in period or exit load. Managed by Nirman S. Morakhia and Arun Agarwal, both experienced professionals, the fund focuses on quality investments in large-cap equities. Investors can choose the Growth plan. HDFC Asset Management Company Ltd oversees the fund, supported by registrar services from CAMS. The AMC's contact information includes an email (shareholders.relations@hdfcfund.com) and a toll-free number (022-66316333). The benchmark for the fund is NIFTY 100 Quality 30 TRI, providing a strong index for performance comparison. Ideal for investors with a long-term perspective and high-risk appetite, this fund emphasizes quality stocks, making it a suitable option for seasoned equity investors.

Details of the NFO: HDFC Nifty100 Quality 30 Index Fund – Direct (G)

Investment Objective and Strategy

Objective:

To generate returns that are commensurate (before fees and expenses)  with  the  performance  of  the Nifty100  Quality  30 Index(TRI), subject to tracking error. There  is  no  assurance  that  the  investment  objective  of the Scheme will be achieved.

Investment Strategy:

HDFC Nifty100 Quality 30 Index Fund will be managed passively with investments in stocks comprising the Underlying Index subject to tracking error. The investment strategy would revolve around reducing the tracking error to the least possible through regular rebalancing of the portfolio, taking into account the change in weights of stocks in the Index as well as the incremental collections/redemptions in the Scheme. A part of the funds may be invested in debt and money market instruments, to meet liquidity requirements.

Since the Scheme is index fund, it will only invest in securities constituting the Underlying Index. However, due to corporate action in companies comprising the index, the Scheme may be allocated/allotted securities which are not part of the index. Such holdings would be rebalanced within 7 Calendar Days from the date of allotment / listing of such securities. As part of the Fund Management process, the Scheme may use derivative instruments such as index futures and  options, or any other derivative instruments that are permissible or maybe permissible in future under applicable regulations. However, trading in derivatives by the Scheme shall be for restricted purposes as permitted by the regulations. For detailed derivative strategies, please refer to SAI. The  Scheme  may  also  invest  in  the  debt schemes of Mutual Funds in terms of the prevailing SEBI (MF) Regulations. Though every endeavor will be made to achieve the objective of the Scheme, the AMC/Sponsor/ Trustee do not guarantee that the investment objective of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme.

What Type of Investor Should Invest in This NFO?

The HDFC Nifty100 Quality 30 Index Fund is ideal for investors seeking a passive investment strategy aligned with a well-defined benchmark. It is best suited for those with a high-risk appetite, a long-term horizon, and a preference for quality-focused large-cap equities. The fund’s low minimum investment of ₹100 makes it accessible to beginners, while its no entry or exit load feature appeals to seasoned investors looking for cost-effective exposure to quality stocks. Overall, the fund is a good fit for investors who value consistent, market-aligned returns without actively managing their portfolio.

What Are the Risks Associated with This NFO?

Investing in this fund comes with risks, including market volatility due to its equity-focused nature and potential tracking errors as it passively replicates the Nifty100 Quality 30 Index. Concentration risk arises from its focus on 30 quality stocks, which could amplify losses if key holdings underperform. Temporary liquidity constraints and regulatory changes can also affect the fund’s performance. Additionally, the absence of guaranteed returns and sensitivity to economic conditions make it unsuitable for conservative investors. Despite these risks, disciplined long-term investors with a diversified portfolio may find this fund a rewarding addition.