Mirae Asset Mutual Fund has unveiled its new product, the Mirae Asset Nifty 200 Alpha 30 ETF. This open-ended scheme aims to track the Nifty 200 Alpha 30 TRI. The index comprises 30 large and mid-cap stocks selected from the main Nifty 200 Index based on the ‘Jensen Alpha’ criteria. Stocks are weighted in the index based on their alpha score, which means shares with higher alpha (or outperformance) will have a more prominent position in the portfolio.
The Mirae Asset Nifty 200 Alpha 30 ETF subscription will open on 9th October 2023 and will close on 18th October 2023. The fund is managed by Ekta Gala and Vishal Singh. During the NFO period, the minimum investment amount is 5000 rupees, and post that, investments can be made in multiples of 1 rupee. The ETF is expected to be listed on the NSE and BSE within five days of the allotment.
A unique feature of this ETF is its blend of both active and passive investment strategies, earning it the moniker of a ‘smart beta ETF.’ Smart beta strategies focus on factors like alpha, reduced volatility, and quality. Globally, smart beta ETFs are a popular investment product. As of February 2023, there are 1,281 smart beta equity ETFs with assets under management of $1.27 trillion across 2,655 listings.
Siddharth Shrivastav, Head of ETF Product at Mirae Asset Investment Managers, expressed his excitement about the launch, emphasizing that Mirae Asset Mutual Fund has been at the forefront of introducing innovative ETF offerings to Indian investors over the years.
The ETF will follow an alpha and momentum strategy. Its portfolio will contain 30 large and mid-cap stocks, where selection and weighting will be based on stock alpha rather than the free-float market cap. The aim will be to capture market trends and top-performing stocks through quarterly rebalancing.
The allocation towards large and mid-cap segments and sectors in the portfolio will evolve based on performance cycles. In emerging markets like India, the alpha strategy has shown commendable performance over the long term, especially during bullish phases, albeit with heightened volatility.
For investors keen on capitalizing on a momentum/alpha strategy after evaluating their risk profile, this product could be a worthy addition to their investment portfolio.
