Nippon India Launches Ultra-Liquid Nifty 1D Rate ETF — Park Funds Smartly!

The NFO is an open-ended Exchange Traded Fund (ETF) introduced by Nippon India Mutual Fund, designed to closely mirror the Nifty 1D Rate Index. This fund aims to offer investors current income with minimal risk and high liquidity by investing predominantly in short-term instruments such as Tri-Party Repos, Treasury Bills, and Government Securities. With a low-risk profile, no exit load, and a daily NAV update, the NFO is suitable for investors seeking secure, short-duration investments with ease of buying and selling through the stock exchange. It provides an ideal avenue for parking surplus funds while maintaining flexibility and safety.

Key Features of Nippon India Nifty 1D Rate Liquid ETF

• Opening Date: July 16, 2025
• Closing Date: July 18, 2025
• Exit Load: Not Applicable
• Minimum Investment Amount: ₹1,000 and in multiples of ₹1 thereafter

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Objective of Nippon India Nifty 1D Rate Liquid ETF

The objective of the Nippon India Nifty 1D Rate Liquid ETF - Growth is to generate current income with low risk and high liquidity by investing in instruments that replicate the Nifty 1D Rate Index, such as Tri-Party Repos, Treasury Bills, and short-maturity Government Securities. It aims to match the performance of the index before expenses, subject to tracking error.

Investment Strategy of Nippon India Nifty 1D Rate Liquid ETF

• The scheme passively tracks the Nifty 1D Rate Index.
• 95–100% of assets are invested in index components like Tri-Party Repos and short-term G-Secs.
• Up to 5% may be held in cash or money market instruments.
• No investments are made in derivatives or foreign assets.
• It follows a "Buy and Hold" strategy, with portfolio rebalancing as per index changes.

Risks Associated with Nippon India Nifty 1D Rate Liquid ETF

• Interest Rate Risk: The Value of securities may fluctuate with changing interest rates.
• Liquidity Risk: Fixed income markets may have limited buyers at fair prices.
• Credit Risk: Issuers might default on interest or principal payments.
• Market Risk: Macroeconomic factors could impact the NAV.
• Reinvestment Risk: Cash flows may be reinvested at lower rates.
• Tracking Error Risk: Performance may slightly deviate from the index.

Risk Mitigation Strategy by Nippon India Nifty 1D Rate Liquid ETF

The Nippon India Nifty 1D Rate Liquid ETF - Growth uses passive index tracking to minimise risk, ensuring no fund manager bias. It maintains alignment with the Nifty 1D Rate Index through regular portfolio rebalancing and daily inflow/outflow monitoring. Investment is focused on highly liquid, short-duration instruments to reduce credit and interest rate risks. Exposure to long-term instruments is avoided, and investments are limited to short-term debt, overnight, and liquid schemes. For further risk control, the AMC uses credit analysis, margin monitoring, and in-house evaluation to assess issuers and maintain liquidity and security.

What Type of Investor Should Invest in Nippon India Nifty 1D Rate Liquid ETF - Growth?

• Investors seeking low-risk income with high liquidity
• Short-term investors looking for parking funds temporarily
• Those aiming for better returns than traditional savings accounts
• Investors are comfortable with index-tracking passive debt products

Where Will the Nippon India Nifty 1D Rate Liquid ETF Invest?

• Instruments that are part of the Nifty 1D Rate Index.
• Tri-Party Repos, Treasury Bills, and Government Securities with less than 91 days maturity.
• Money market instruments like certificates of deposit, commercial papers, and call money.
• Overnight, Liquid, and Money Market schemes of Nippon India Mutual Fund or other mutual funds.