Bandhan BSE India Sector Leaders Index Fund: Bandhan MF files draft with SEBI; check key details

Bandhan Mutual Fund has filed its draft document with SEBI to launch a new index fund: Bandhan BSE India Sector Leaders Index Fund, an open-ended index fund that will track the BSE India Sector Leaders Index.

Let’s look at the key details about the upcoming fund, as per the details in the draft document.

Fund type and structure

• Category: Index Fund
• Type: Open-ended scheme tracking the BSE India Sector Leaders Index

BSE India Sector Leaders Index is a sectoral/thematic index that includes leading companies across different sectors. With a minimum of 10 stocks, the index is designed to represent the leaders of different sectors on the BSE. To avoid over-concentration in any single stock or sector, it has caps on weights.

“The Scheme will be managed passively with investments in stocks in proportion to the weights of these stocks in the BSE India Sector Leaders Index,” states the fund’s draft document.

As per the diversification rules, the index must have at least 10 stocks, no single stock must exceed 35% weight, and the top three stocks should not carry more than 65% weightage. The index is reviewed periodically, and the fund will rebalance within 7 days of any changes.

Investment requirements

During the NFO period:

• Lump sum: ₹1,000 and in multiples of ₹1 thereafter
• SIP: ₹100 (minimum six instalments)

After the NFO:

• Fresh purchases: ₹1,000 and in multiples of ₹1 thereafter
• SWP: ₹200 and any amount thereafter
• SIP: ₹500 and any amount thereafter

Minimum additional purchase: ₹1,000

Minimum redemption amount: ₹500 or the entire account balance, whichever is lower

Exit load

The exit load on this fund, which is the fee that investors are required to pay if they redeem (sell) their units before a specific period, is 0.25% if redeemed on or before 15 days from allotment. After that, there is no fee.

NFO date

The dates for the NFO period are yet to be announced. The NFO will be kept open for subscription for a minimum of 3 working days and a maximum of 15 days.

Who may invest in this fund?

Index funds are a type of investment that tracks the performance of a specific market index.

This index fund may be suitable for those who want to invest for the long term with exposure to sector leaders. However, investors must read the details and all the important factors, like asset allocation, of the fund carefully before investing in it.

• 95-100% in stocks of the BSE India Sector Leaders Index
• Up to 5% in debt and money market instruments for liquidity