Edelweiss MF to merge Nifty Largemidcap 250 Index Fund and ETF-Nifty Bank: A win-win for investors

Ready for remarkable returns? Learn about Edelweiss MF's merger of ETF-Nifty Bank and Nifty Largemidcap 250 Index Fund! Read the full article.

Edelweiss MF Announces Merger of ETF Nifty Bank and Nifty Largemidcap 250 Index Fund
  • Edelweiss ETF-Nifty Bank will merge with the  Edelweiss Nifty Large Midcap 250 Index Fund
  • Edelweiss Nifty Large Midcap 250 Index Fund will exist after the merger
  • Merger effective from August 7, 2023
  • Existing unit holders can exit or switch

Edelweiss Mutual Fund has made an exciting announcement regarding the merger of two of its prominent schemes. The renowned Edelweiss ETF-Nifty Bank (EENB), which tracks the Nifty Bank Index, will be merged with the Edelweiss Nifty Large Midcap 250 Index Fund (ENLM250IF), an open-ended equity scheme that replicates the Nifty Large Midcap 250 Index. This strategic move aims to enhance the offerings in the realm of index funds, providing investors with a comprehensive and diversified investment opportunity. Let's delve deeper into the details of this merger.

What can we expect from the merger of EENB with ENLM250IF?

The highlights of the merger of the two schemes are mentioned below:

  • EENB and ENLM250IF will be merged.
  • ENLM250IF will continue to exist after the merger.
  • The merger will be effective from August 7, 2023.
  • The merging scheme EENB will no longer exist and unit holders of the merging scheme will become unit holders of the surviving scheme.
  • No fresh subscription will be accepted in the merging scheme from July 6, 2023.
  • The merging scheme will be delisted two business days prior to the closure of the exit option period.
  • Existing investers in  both the schemes will be given an exit option i.e. they redeem their units (partly or fully) or switch to other schemes of the fund house at the applicable NAV of the scheme without any exit load for a period of 30 days starting from July 6, 2023 till August 4, 2023 (both days inclusive).

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Rationale for the merger

Edelweiss Mutual Fund is merging its EENB with the ENLM250IF to provide more liquidity to EENB investors. As of May 31, 2023, EENB had assets under management (AUM) of Rs 1.68 crore and 197 investors, while ENLM250IF had AUM of Rs 49.80 crores and 5,842 investors. The merger will offer EENB investors easy liquidity, reduced transaction costs, the option to invest directly without a demat account, and lower brokerage costs. It will also allow them to participate in the growth of the large and midcap market, as the underlying stocks of EENB are also part of ENLM250IF.

Implications of tax

Allotment of units to surviving scheme after merger not treated as redemption, no capital gain/loss. But redemption/switch-out during exit period will incur capital gain/loss for unitholders. TDS applicable for NRI investors during exit period.

Also Read: Edelweiss launches the maiden short-term index fund. Should you invest?

The merger of EENB with ENLM250IF aims to provide liquidity, reduced costs, and direct investment options for EENB investors, while allowing them to participate in the growth of the large and midcap market.


Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax advice.


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