UTI Mutual Fund files papers for passive fund

UTI Mutual Fund has filed draft prospectus for launching passively-managed Momentum Index Fund that will track Nifty 200 Momentum 30 Index.

The fund will invest in the stocks constituting the index and provide returns that closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.

The minimuminitial investment will be ₹5,000 and subsequently ₹1,000 per folio.

The scheme will invest predominantly in stocks constituting the underlying index in approximately the same weight they represent in the index or investing in derivatives including futures contracts on the said index.

The scheme may take an exposure to equity derivatives of constituents of the underlying index for short duration when securities of the index are unavailable, insufficient or for rebalancing at the time of change in index, in case of corporate actions and for hedging purposes.

It will also invest in money market instruments, repos in the form of investment, where the counterparty is rated not below investment grade, derivatives traded on recognised stock exchanges for hedging and portfolio balancing with underlying as securities.