The new fund offer (NFO) for both schemes will open on September 30 and close on October 14.
Both schemes will track the BSE Total Market Total Return Index (TRI), providing exposure to companies across large-, mid-, small- and micro-cap segments.
According to the fund house, the index represents around 93% of India’s total market capitalisation. It comprises stocks representing 98% of the market capitalisation of the BSE AllCap Index, subject to a minimum of 1,000 stocks, with no upper limit on the number of constituents.
What the fund will invest in
The BSE Total Market Index currently has exposure across 22 sectors. Its market-cap allocation includes around 56% in large-cap stocks, 20% in mid-caps, 10% in small caps and 7% in micro-caps, according to Aditya Birla Sun Life AMC.
The index uses free-float market capitalisation to determine constituent weights and is rebalanced twice a year, in June and December.
The index does not have a fixed upper limit on the number of stocks it can hold. This allows its constituent universe to expand as India’s listed equity market grows, the fund house said.
Index fund vs ETF
The Aditya Birla Sun Life BSE Total Market Index Fund will provide access to the index through a mutual fund structure, while the Aditya Birla Sun Life BSE Total Market ETF will offer the same index exposure through an exchange-traded fund.
Both schemes will seek to replicate the BSE Total Market TRI, subject to tracking error.
For investors, the key difference is therefore the investment route: an index fund can be bought and redeemed through the mutual fund structure, while an ETF is traded on the stock exchange during market hours.