Taurus MF to launch Nifty NFO

Taurus Mutual Fund today announced the launch of Taurus Nifty Index Fund,an open-ended index linked equity scheme.

The NFO opens on June 4 and closes on June 10.

“The fund will replicate the the S&P CNX Nifty Index by investing in the securities of S&P CNX Nifty Index in the same proportion/weightage,” Taurus Mutual Fund’s Chief Executive,Waqar Naqvi,told reporters here.

The Fund is expected to garner Rs 25-crore from the new fund offer. The total size of the index fund is Rs 1,100-crore,Naqvi said.

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The fund is expected to provide an opportunity to own 50 of the fundamentally strong and best-known companies in India.

In developed markets like the USA and Europe,index funds are more favoured by retail investors as compared to actively managed funds. But at least 70 per cent of the actively managed funds fail to outperform the S&P 500 Index consistently over various time-frames.

However,in India,historically a majority of the actively managed funds have outperformed the index funds in the long-term since the markets were in the evolutionary stage,he said.

As the Indian markets are fairly developed now,the fund managers may find it difficult to outperform the market consistently over various time-frames.

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While investors may continue to hold a large portion of their investments in actively managed equity funds,from a diversification perspective,their equity funds portfolio may have 15-20 per cent exposure to index funds.

As the Indian growth story continues,the Taurus Mutual Fund is bullish on sectors like banking and pharmaceuticals and mid-cap stocks,Taurus Mutual Funds’ Vice-President,Sadanand Shetty,said.

The fund is overweight on FMCG and telecom sectors,Shetty said.