Mirae Asset Launches Nifty50 Equal Weight ETF on April 30

Mirae Asset Mutual Fund is set to launch a new exchange-traded fund (ETF) — the Mirae Asset Nifty50 Equal Weight ETF — on April 30, 2025. This open-ended scheme falls under the "Other ETFs" category and aims to generate returns, before expenses, that closely align with the performance of the Nifty50 Equal Weight Total Return Index, subject to tracking error. Unlike traditional Nifty50 funds that are weighted by market capitalization, this ETF provides equal exposure to each of the 50 index constituents, ensuring diversified risk allocation.

The New Fund Offer (NFO) will remain open for subscription until May 6, 2025, with a minimum subscription amount of just ₹1, making it accessible to all categories of investors. While the Mirae Asset Nifty50 Equal Weight ETF does not assure any returns, it offers a unique opportunity to gain balanced exposure to India's top 50 companies.

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Key Details of Mirae Asset Nifty50 Equal Weight ETF

Objective of Mirae Asset Nifty50 Equal Weight ETF :

The investment objective of the Mirae Asset Nifty50 Equal Weight ETF is to generate returns, before expenses, that are commensurate with the performance of the Nifty50 Equal Weight Total Return Index, subject to tracking error. The Scheme does not guarantee or assure any returns.
There is no assurance that the investment objective of the Mirae Asset Nifty50 Equal Weight ETF will be achieved.

Investment Strategy of Mirae Asset Nifty50 Equal Weight ETF

• The scheme will passively invest in the same stocks and in the same proportion as the Nifty50 Equal Weight Total Return Index.
• It will follow a buy-and-hold strategy, rebalancing only to reflect changes in the index composition and weightings.
• The fund manager aims to minimize tracking error by regularly aligning the fund’s holdings with the benchmark index.
• Debt and money market instruments may be used for liquidity needs and to manage cash flow mismatches.
• The scheme will not actively manage stocks or time the market; instead, it will replicate index performance.
• Investments may be made in mutual fund Mirae Asset Nifty50 Equal Weight ETF or derivatives, but only in line with SEBI guidelines and within the scheme’s objective.
• The strategy is centered around providing diversified exposure to all 50 Nifty stocks on an equal-weight basis, avoiding overconcentration in any single large-cap stock.

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Risks Associated with Mirae Asset Nifty50 Equal Weight ETF

• Market Risk: The NAV may fluctuate due to market volatility, economic instability, and global events impacting investor sentiment.
• Tracking Error Risk: Deviation from index performance due to expenses, inflows/outflows, and changes in underlying securities.
• Liquidity Risk: Illiquid securities or ETFs might be difficult to buy or sell, especially during volatile market conditions.
• Credit Risk: Exposure to debt instruments may carry default risk, even though mitigated by internal caps and research.
• Derivative Risk: Use of derivatives introduces leverage, potentially resulting in disproportionate gains or losses.
• Passive Management Risk: Since the fund follows an index, it may underperform actively managed funds in certain market cycles.
• Concentration Risk: Although equally weighted, the fund is still exposed to Nifty50 constituents, which may show sector bias at times.
• Operational Risk: Risks related to system failures, process errors, or regulatory changes that might affect fund performance.

Risk Mitigation Strategy by Mirae Asset Nifty50 Equal Weight ETF

The Mirae Asset Nifty50 Equal Weight ETF employs several mechanisms to mitigate associated risks. As a passively managed ETF, it reduces active management risks and aligns closely with the benchmark index. The regular tracking and rebalancing of the portfolio ensure that stock weights are kept consistent with the index, thereby minimizing tracking error.

The Mirae Asset Nifty50 Equal Weight ETF also maintains exposure limits to individual issuers in its debt and money market investments, thereby reducing credit risk. Derivative exposure, if undertaken, will be carefully monitored and used only within SEBI-prescribed limits to avoid excessive volatility. By diversifying equally across 50 stocks, the ETF avoids overconcentration in large caps or any single sector. Overall, the risk mitigation strategy is rooted in disciplined portfolio replication, liquidity management, and compliance with SEBI norms.

What Type of Investor Should Invest in Mirae Asset Nifty50 Equal Weight ETF?

• Investors seeking diversified equity exposure without overdependence on a few large-cap stocks.
• Those who prefer a passive investment strategy aligned with a well-established index.
• Investors with a medium to long-term investment horizon looking to build wealth gradually through market participation.
• Individuals aiming to reduce stock-specific and sector-specific concentration risks in their portfolios.
• Those who want cost-effective index-based investing with minimal fund manager bias.
• Ideal for investors who are comfortable with market volatility and are not looking for guaranteed returns.
• Suitable for first-time investors in equity ETFs as well as experienced investors looking to diversify existing holdings.
• Investors focused on capital appreciation in line with broader equity market performance.