The units of the scheme will be compulsorily traded in dematerialised form, and hence there will be no entry/exit load for units purchased or sold through stock exchanges, as per the draft offer document
Aditya Birla Sun Life Mutual Fund has sought the Securities and Exchange Board of India’s approval to launch Aditya Birla Sun Life Banking ETF, according to the draft offer document on the market regulator’s website.
The open-ended exchange traded fund (ETF) tracking the Nifty Bank will deploy at least 95 percent of its assets in stocks comprising the index, with the balance allocated to debt and money market instruments.
The units of the scheme will be compulsorily traded in dematerialised form, and hence there will be no entry/exit load for units purchased or sold through stock exchanges, as per the draft offer document.
ETFs are usually passively managed funds wherein subscription/redemption of units work on the concept of exchange with underlying securities. Units can be bought and sold directly on the exchange.
ETFs have all the benefits of indexing such as diversification, low cost and transparency. As ETFs are listed on the exchange, costs of distribution are much lower and the reach wider.
These savings in cost are passed on to the investors in the form of lower costs. The exchange-traded mechanism helps reduce minimal collection, disbursement and other processing charges. The ETF structure is such that it protects long-term investors from inflows and outflows of short-term investors as it does not bear extra transaction cost when buying/selling due to frequent subscriptions and redemptions.Other features:
Minimum investment: Rs 5,000 and in multiples of Rs 1,000 thereafter
Performance Benchmark: Nifty Bank IndexFund manager: Lovelish Solanki
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