NFO launch | Edelweiss AMC's three passive equity funds open for subscription — Check details

These 3-equity passive index funds can be used to create own low-cost multi-cap portfolio. The combo allocation allows investors to get exposure in high-growth companies (via Edelweiss Nifty Next 50 Index Fund), rule-based Momentum play in Midcap space (Edelweiss Nifty Midcap 150 Momentum 50 Index Fund), and companies that are emerging leaders (Edelweiss Nifty Smallcap 250 Index Fund), according to the AMC.

A key benefit for an investor to invest via combo allocation is that it allows diversification across sectors and market cap with low cost.

"Such combo helps to improve the risk-adjusted returns for investors and has consistently (Trailing and Rolling basis) outperformed Category Average Flexicap Funds and Nifty 500 Index TRI. This may also provide a much-needed boost, in terms of returns to the portfolio. Investors can also be better off investing in these combos through a Systematic Investment Plan (SIP)," the AMC said.

Edelweiss Nifty Next 50 Index Fund will aim to replicate the constituents of Nifty Next 50 Index. 50 companies from NIFTY 100 are selected after excluding the constituents of NIFTY 50 Index. Their weights are assigned based on companies’ free-float market-cap.

Edelweiss Nifty Midcap 150 Momentum 50 Index Fund will aim to replicate the constituents of Nifty Midcap 150 Momentum 50 Index. The index consist of 50 companies based on the highest Momentum Score. This is derived from the last six and twelve months’ price returns adjusted for volatility. Weights are derived by multiplying the stock’s free-float market cap with the momentum score. Each stock in the index is capped at the lower of 5 percent or 5 times the weight of the stock in the index based only on free float market capitalization.

Edelweiss Nifty Small cap 250 Index Fund will aim to replicate the constituents of Nifty Small cap 250 Index. The selection of stocks will be based on 250 companies representing the companies ranked 251-500 from the NIFTY 500 Index. Weights are assigned based on the free-float market cap of the stocks, the fund house said.