HDFC Mutual Fund Launches Nifty Metal ETF, FOF for Metals Sector Exposure

HDFC Mutual Fund has launched two schemes focused on the metals sector, the HDFC Nifty Metal ETF and the HDFC Nifty Metal ETF Fund of Fund (FOF) — offering investors exposure to companies operating across steel, aluminium, copper, zinc, mining and other metal-related segments.

The New Fund Offer (NFO) for the HDFC Nifty Metal ETF opened on July 20 and will close on July 24.

The HDFC Nifty Metal ETF FOF will remain open until August 3.

The schemes are designed to track the performance of the Nifty Metal Index Total Return Index (TRI), which comprises companies from the metals and mining space. The ETF will seek to replicate the index performance, subject to tracking error.

The ETF Fund of Fund route will invest predominantly in units of the HDFC Nifty Metal ETF. Unlike the ETF, investors in the FOF do not need a demat or trading account to gain exposure to the underlying metal sector portfolio.

Sector exposure and investment strategy

The fund house said the schemes aim to provide investors with exposure to the metals sector, which could benefit from demand drivers such as infrastructure development, manufacturing growth, renewable energy, electric vehicles and expansion of data centres.

The portfolio will provide exposure to companies across different segments of the metals value chain, including producers of steel, aluminium, copper, zinc and other mining-related businesses.

However, as sector-focused funds, their performance will depend on the outlook for the metals industry, including factors such as commodity price cycles, global demand trends, input costs, currency movements and government policies.

Investment details

The minimum investment amount during the NFO period is ₹500 for the HDFC Nifty Metal ETF and ₹100 for the HDFC Nifty Metal ETF FOF.

The ETF will have no entry or exit load. The FOF will also not charge any entry load, while a 1% exit load will apply if investors redeem or switch out units within 15 days from allotment. No exit load will be charged after the completion of this period.

The HDFC Nifty Metal ETF will be managed by Abhishek Mor and Arun Agarwal, while Nandita Menezes and Arun Agarwal will manage the HDFC Nifty Metal ETF FOF.

With these launches, HDFC Mutual Fund joins the growing list of fund houses offering thematic and sector-based investment products that allow investors to take targeted exposure to specific parts of the equity market.

Sector funds, however, typically carry higher concentration risks compared with diversified equity schemes as their returns are closely linked to the performance of a particular industry.