Aditya Birla Sun Life Launches BSE 500 Quality 50 Index Fund NFO from July 21
By Shishta Dutta | Published at: Jul 15, 2025 09:33 AM IST
Mumbai, July 15, 2025: Aditya Birla Sun Life Mutual Fund has announced the launch of a new passive equity product, the Aditya Birla Sun Life BSE 500 Quality 50 Index Fund. The New Fund Offer (NFO) will open for subscription on Monday, July 21, 2025, and will close on Monday, August 4, 2025.
This scheme is an open-ended index fund specifically designed to replicate the BSE 500 Quality 50 Total Return Index. Its primary objective is to deliver returns that closely track the performance of the underlying index, before accounting for expenses and subject to tracking error.
NFO & Scheme Details
Here’s a summary of the key details for the new fund:
| Particulars | Details |
|---|---|
| Fund Name | Aditya Birla Sun Life BSE 500 Quality 50 Index Fund |
| Fund Type | Open-ended Index Fund |
| Benchmark | BSE 500 Quality 50 Total Return Index |
| NFO Period | July 21, 2025 – August 4, 2025 |
| Scheme Re-opens | Within 5 business days of allotment |
| Fund Manager | Ms. Priya Sridhar |
| Face Value | ₹10 per unit during NFO |
| Minimum Investment | ₹500 and in multiples of ₹100 thereafter |
| Exit Load | 0.10% if redeemed within 15 days; Nil after |
| Plans Available | Regular & Direct Plan |
| Options | Growth and IDCW (Payout only) |
| Risk-o-Meter | Very High Risk (Scheme & Benchmark) |
Investment Strategy & Allocation
The fund will adopt a passive investment approach, aiming to minimise tracking error while mirroring the performance of its benchmark index. Under normal market conditions, the fund intends to invest 95% to 100% of its assets in equity and equity-related instruments of the BSE 500 Quality 50 Index. Up to 5% may be invested in debt and money market instruments to manage liquidity.
Exposure to derivatives is capped at 20% of net assets and will be utilised primarily for portfolio rebalancing and hedging purposes as needed.
About the Benchmark Index
The BSE 500 Quality 50 Total Return Index (TRI) is a carefully constructed index that selects 50 companies from the broader BSE 500 index. The selection is based on three core financial metrics that define “quality”:
- Return on Equity (ROE): This metric indicates how efficiently a company uses shareholders’ equity to generate profits. A higher ROE generally suggests better management effectiveness.
- Accruals Ratio: This ratio helps identify the proportion of non-cash or accrual-derived earnings to total earnings. A lower or negative accruals ratio is often seen as a positive sign, indicating that a larger portion of earnings is backed by actual cash flow, rather than accounting accruals, which can be less sustainable. It’s a measure of earnings quality.
- Financial Leverage Ratio: This assesses the degree to which a company uses borrowed funds (debt) to finance its assets. A lower financial leverage ratio indicates less reliance on debt and a more stable financial position. It’s typically calculated as Total Debt / Total Equity or Total Assets / Total Equity (Equity Multiplier).
The weightings of stocks within the index are adjusted based on the product of their float-adjusted market capitalisation and their calculated quality score. The index is designed to include financially healthy companies with strong earnings, stable balance sheets, and consistent performance.
| Top Holdings | Weight (%) |
|---|---|
| Bharat Electronics Ltd | 4.24 |
| HCL Technologies Ltd | 4.12 |
| Infosys Ltd | 4.06 |
| ITC Ltd | 4.00 |
| Nestle India Ltd | 3.99 |
| Coal India Ltd | 3.94 |
| HDFC AMC Ltd | 3.94 |
| Britannia Industries Ltd | 4.04 |
| Tata Consultancy Services Ltd | 4.03 |
| Hindustan Aeronautics Ltd | 4.02 |
(Source: Index constituents list on pages 34–35 of the SID)
Unique Features and Facilities
Aditya Birla Sun Life Mutual Fund offers several investor-friendly features with this fund:
- Systematic Investment Plans (SIPs): Available for both monthly and weekly frequencies, starting from ₹500.
- Step-Up SIP and SIP Pause facilities: Providing flexibility for investors to adjust their SIPs.
- Systematic Transfer Plan (STP) and Systematic Withdrawal Plan (SWP) enabled: Allowing for systematic movements of funds.
- Units available in both physical and demat form: Offering convenience to investors.
- Online and ASBA-based applications allowed: Simplifying the application process.
Taxation Highlights
| Type of Income | Resident Investors | Mutual Fund |
|---|---|---|
| IDCW | Taxed at slab rate (TDS applicable if > ₹10,000/year) | NIL |
| Capital Gains – LTCG | 12.5% + surcharge + cess | NIL |
| Capital Gains – STCG | 20% + surcharge + cess | NIL |
(Source: Taxation table on page 49)
About Aditya Birla Sun Life Mutual Fund
Aditya Birla Sun Life Mutual Fund, a joint venture between Aditya Birla Capital Limited and Sun Life Financial Inc. of Canada, is one of India’s leading fund houses. The AMC offers a wide range of debt, equity, and hybrid funds across investor categories and has been registered with SEBI since 1994.
REF: https://portal.amfiindia.com/spages/14264.pdf
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