Passive investing has been gaining ground in India primarily due to broader participation of retirement trusts and increasing investor awareness. Axis Mutual Fund has launched a new fund offer – Axis Banking ETF (Exchange Traded Fund).
The new fund offers will be open for subscription between October 16 and 29.
The ETF offers investors an opportunity to invest in the biggest banks. Passive funds are designed to track the performance of an index. They achieve this by replicating the portfolio of the underlying index.
Axis Banking ETF is designed to track the performance of the 12 largest banks listed on the NSE. Only banking stocks that are allowed to trade in F&O segment are eligible to be constituent of the index. Currently, the index has 83.3 per cent exposure to private banks and 11.7 per cent to PSU banks.
Banking is the lifeline of the financial sector. Its importance in the economy has been growing consistently as the long term shift to the financialisation of household assets and greater demand for financial products.
The banking is now the largest sector in Nifty 50. Even in recent quarters, the banking sector has shown resilience despite the pandemic. Given the scale and the added thrust that the government and regulatory bodies are providing to the banks, the sector is poised for a revolution. Banks are increasingly funding to retail masses and offering services backed by technology that are increasing their potential to scale business.
Chandresh Kumar Nigam, Managing Director & CEO, Axis AMC, said the launch of Banking ETF is a part of efforts to provide investors with a choice of strategies including robust passive products.