Nifty Non-Cyclical Consumer Index Fund

07.05.2024

Nifty Non-Cyclical Consumer Index Fund

 Why in the news?   

Groww Mutual Fund recently launched India’s first Nifty Non Cyclical Consumer Index Fund.

About Nifty Non-Cyclical Index Fund:

• It is a type of mutual fund that aims to generate long-term capital growth by investing in securities of the Nifty Non-Cyclical Consumer Index (TRI).
• This index contains 30 companies that are not majorly impacted by economic instability and are in regular demand, making them a good investment option during economic downturns.
• Non-cyclical stocks are also known as defensive stocks; these stocks outperform their industry in the stock market despite economic instability.
• They are not affected by cyclical changes and are in constant demand due to the everyday needs of consumers, such as food, water, and other utilities.
• The fund aims to generate long-term capital growth by investing in securities of the Nifty Non-Cyclical Consumer Index (TRI) in the same proportion/weightage. This is to offer returns before expenses that track the total return of the Nifty Non-Cyclical Consumer Index (subject to tracking errors).
• This fund is suitable for investors who desire long-term, consistent wealth creation by investing in the top consumer brands seen and utilized by people across India.”

Key Facts about NIFTY:

• It is a market index introduced by the National Stock Exchange (NSE), India's largest stock exchange. It is a blended word: National Stock Exchange and Fifty coined by the NSE.
• It was established in 1996 with the name CNX Nifty. Further, in 2015, it was renamed Nifty 50. It is a benchmark-based index and also the flagship of NSE. It represents the performance of the 50 largest and most actively traded stocks listed on the NSE.
• It includes stocks of companies from 12 sectors like financial services, information technology, consumer goods, metals, pharmaceuticals, energy, etc. and collectively represents India's stock market and economic trends.
• NSE ranks companies based on free-float market capitalization. It is one of the two major stock market indices in India, the other being the Sensex, which is a product of the Bombay Stock Exchange (BSE).

                                                                Source: The Economic Times

What is the primary objective of a Nifty Non-Cyclical Index Fund, recently seen in the news?

A.To generate short-term profits through speculative trading

B.To capitalize on market trends during economic downturns

C.To focus on high-risk, high-return investments

D.To invest in securities of companies that are not impacted by economic instability

Answer D