About the Scheme
Quantum Index Fund (NSE Symbol - QNIFTY) is an Open Ended Fund, which is listed on the National Stock Exchange (NSE) in the form of an Exchange Traded Fund (ETF) tracking the S&P CNX Nifty Index.
Quantum Index Fund (QIF) seeks to offer investors an innovative and cost-efficient way to invest in the S&P CNX Nifty Index and attempts to achieve returns equivalent to the Nifty through “passive” investments. The investment objective of the Quantum Index Fund is to provide returns that, before expenses, closely correspond to the returns provided by the S&P CNX Nifty Index.
The scheme will be managed by replicating the scheme holdings in the same weightage as the S&P CNX Nifty Index with the intention of minimising the performance differences between the scheme and the S&P CNX Nifty Index in capital terms, subject to market liquidity, costs of trading, management expenses and other factors which may cause tracking error.
Through the lower cost of operations, QIF would endeavour to provide investors an excellent means of asset allocation. Each unit of QIF will be approximately equal to 1/10th (one tenth) of the S & P CNX Nifty.
Investments, Creation and Redemption
Quantum Index Fund is listed on the NSE (Symbol: QNIFTY). Like any other security, investors can buy and sell it through their broker on the NSE, or transact using their online trading account.
Expense Ratio
Effective 10
th July 2008, the expense ratio of the fund is 0.75%. Any change in the expense ratio will be updated within two working days.
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B. M. Motafram
For Authorised Participants
Direct purchases of units from the Fund would be restricted to Authorised Participants and Eligible investors (an investor who can subscribe or redeem units in Creation Unit Size - 2,000 units) only. Authorised Participants and Eligible Investors can buy/redeem in creation unit size directly from the Fund on a business days. Direct purchase from the Fund by retail investors would not be permitted. QIF offers the smallest investment basket as compared to the other Index ETFs in the market. APs can create a basket for as little as 2,000 units amounting to approximately Rs.6,00,000 at the current market levels.
Since Authorised Participants and Eligible Investors can buy/sell QIF units directly from the Fund, this would provide efficient arbitrage between the traded prices and the NAV, thereby reducing the incidence of QIF units being traded at a premium/discount to NAV. The retail investors can thus get a fair price for the units held.
Creation Unit
The number of QIF Units that eligible investors and authorized participants can create / redeem on an ongoing basis in exchange of the Portfolio Deposit and Cash Component is 2,000 units and in multiples thereof. The Portfolio Deposit and Cash Component are defined as follows:
- Portfolio Deposit: This is a pre-defined basket of securities that represent the underlying index and will be defined and announced by the fund on allotment date and thereafter on an ongoing basis, and can change from time to time.
- Cash Component for Creation Unit Size: The Cash Component represents the difference between the applicable net asset value of a creation unit and the market value of the Portfolio deposit. This difference will represent accrued dividends, accrued annual charges including management fees and residual cash in the scheme. In addition the Cash Component will also include transaction cost as charged by the Custodian/DP and other incidental expenses for Creating Units. The cash component will vary from time to time and will be decided and announced by the AMC.
Example of Creation and Redemption of Units
As explained above, the Creation Unit is made up of 2 components i.e. the Portfolio Deposit and the Cash Component. The Portfolio Deposit will be determined by the fund as per the weightages of each security in the S&P CNX Nifty Index. The value of this portfolio deposit will change due to change in prices during the day. The number of shares of each security that constitute the portfolio deposit will remain constant unless there is any corporate action in the S&P CNX Nifty Index. The Creation Unit as on March 31, 2008 is as follows
| Sr. No. |
Name |
Quantity |
| 1 |
ABB Ltd |
7 |
| 2 |
ACC Ltd |
6 |
| 3 |
Ambuja Cements Ltd |
67 |
| 4 |
Bharat Heavy Electricals Ltd |
16 |
| 5 |
Bharat Petroleum Corp Ltd |
12 |
| 6 |
Bharti Airtel Ltd |
63 |
| 7 |
Cairn India Ltd |
59 |
| 8 |
Cipla Ltd |
26 |
| 9 |
DLF Ltd |
57 |
| 10 |
Dr Reddys Laboratories Ltd |
6 |
| 11 |
GAIL India Ltd |
28 |
| 12 |
Grasim Industries Ltd |
3 |
| 13 |
HCL Technologies Ltd |
22 |
| 14 |
HDFC Bank Ltd |
12 |
| 15 |
Hero Honda Motors Ltd |
7 |
| 16 |
Hindalco Industries Ltd |
41 |
| 17 |
Hindustan Unilever LTD |
72 |
| 18 |
HDFC |
9 |
| 19 |
ICICI Bank Ltd |
37 |
| 20 |
Idea Cellular Ltd |
88 |
| 21 |
Infosys Technologies Ltd |
19 |
| 22 |
ITC Ltd |
125 |
| 23 |
Larsen & Toubro Ltd |
10 |
| 24 |
Mahindra & Mahindra Ltd |
8 |
| 25 |
Maruti Suzuki India Ltd |
10 | |
| Sr. No. |
Name |
Quantity |
| 26 |
National Aluminium Co Ltd |
21 |
| 27 |
NTPC Ltd |
274 |
| 28 |
Oil & Natural Gas Corp Ltd |
71 |
| 29 |
Power Grid Corp of India Ltd |
140 |
| 30 |
Punjab National Bank Ltd |
10 |
| 31 |
Ranbaxy Laboratories Ltd |
12 |
| 32 |
Reliance Communications Ltd |
69 |
| 33 |
Reliance Energy Ltd |
8 |
| 34 |
Reliance Industries Ltd |
48 |
| 35 |
Reliance Petroleum Ltd |
150 |
| 36 |
Satyam Computer Services Ltd |
22 |
| 37 |
Siemens India Ltd |
11 |
| 38 |
State Bank of India Ltd |
21 |
| 39 |
Steel Authority Of India Ltd |
137 |
| 40 |
Sterlite Industries India Ltd |
24 |
| 41 |
Sun Pharma |
7 |
| 42 |
Suzlon Energy Ltd |
50 |
| 43 |
Tata Communications Ltd |
9 |
| 44 |
Tata Consultancy Services Ltd |
33 |
| 45 |
Tata Motors Ltd |
13 |
| 46 |
Tata Power Co Ltd |
7 |
| 47 |
Tata Steel Ltd |
24 |
| 48 |
Unitech Ltd |
54 |
| 49 |
Wipro Ltd |
49 |
| 50 |
Zee Entertainment Enterprises Ltd |
14 | |
- Value of Portfolio Deposit (for 2,000 units) - Rs. 9.46 lakhs
- Index as on March 31, 2008 – 4734.50; One unit is equal to 1/10th Nifty
- Suppose NAV per unit as on March 31, 2008 -Rs 475. Total NAV for 2,000 units would be Rs 9.50 lakhs
- So, the value of Cash Component for Creation/Redemption would be Rs. 9.50 lakhs less Rs. 9.46 lakhs = Rs. 0.04 lakhs
- Entry and Exit Load – Nil. Transaction & other charges will be payable as per actual.
Estimated Annual Scheme Recurring Expenses (as a % of Average Weekly Net Assets)
The AMC has estimated the expenses under the Scheme to be as per the table below
| Particulars |
% of Avg Weekly Net Assets |
| Investment Management & Advisory Fees |
0.25 |
| Marketing & Selling Expenses |
0.14 |
| Custodian, Trustee Fees, Registrar Fees, Audit, Legal and Other Expenses |
0.25 |
| Fees payable to IISL for sub-licensing S & P CNX Nifty Marko |
0.11 |
| Total Annual Recurring Expenses |
0.75 |
How the Fund Works
How to Invest
Quantum Index Fund is listed on the National Stock Exchange (NSE) with the symbol QNIFTY. You can buy/sell Quantum Index Fund units on the National Stock Exchange, through your stock broker, or through your online trading service.
You can purchase QIF Units from any NSE broker-member. Broker codes for some of the online trading services is mention below :
Broker codes for online trading services is mentioned below :
| Broker Name |
QIF Unit Ticker |
| HDFC Securities |
QUAINDEQNR |
| ICICI Direct |
QINDEX |
| Sharekhan |
QNIFTY |
Important Note : QIF can be found under the equity section, and not mutual fund section, of your online trading service.
Please read the Scheme Information Document and Statement of Additional Informaion carefully before investing.