Nippon Life India Asset Management Limited (NAM India) asset manager of Nippon India Mutual Fund (NIMF) on Monday (January 3, 2022) announced the launch of India’s First Auto sector ETF – Nippon India Nifty Auto ETF. It is an open-ended scheme replicating/tracking the Nifty Auto Index.
The NFO will open on 5th January 2022 and close on 14th January 2022. The minimum investment amount required during New Fund Offer (NFO) is Rs 1,000 and in multiples of Re 1 thereafter.
In a statement, NIMF said that Nippon India Nifty Auto ETF will predominantly invest in stocks comprising of the Nifty Auto Index in the same proportion as the Index. It will provide exposure to Top 15 (as per Nifty Auto Index methodology) companies representing auto-related sectors like Automobiles 4 wheelers, Automobiles 2 and 3 wheelers, Auto Ancillaries, and Tyres.
NIMF further said that the auto ETF is fully designed to reflect the behaviour and performance of the Automobiles sector. It will be benchmarked against Nifty Auto TRI.
“The investment objective of the scheme is to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty Auto Index before expenses, subject to tracking error. However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved,” it added.
Commenting on the NFO Hemen Bhatia, Head ETF, NIMF said, “Nippon India Nifty Auto ETF is yet another addition to our ETF offerings, helping investors to participate in India’s Auto sector growth story through investing in a basket of 15 stocks representing the Nifty Auto Index.”
“Nippon India Nifty Auto ETF which is the first Auto sector ETF to be launched in India, will provide a simple and low-cost (in terms of total expense ratio) portfolio building block to participate in the auto sector…With most headwinds like supply constraints of semi-conductor along with increasing commodity prices behind us and with the street view moving from fear of electrification to seeing Electric Vehicle (EV) as an opportunity, investors will get exposure to EV theme as well, as part of the overall auto sector exposure,” he added.
NIMF is one of the largest ETF players in India with an AUM of over Rs 500 billion as on November 30, 2021.
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