Nifty Auto ETF: Nippon India Mutual Fund launches Nifty Auto ETF

Nippon India Mutual Fund has launched Nippon India Nifty Auto ETF. The Auto ETF is an open program that tracks the Nifty Auto index.

The program’s new fund offering will open on January 5 and will close for subscription on January 14. The minimum investment amount required during the New Fund Offering (NFO) is Rs 1,000 and in multiples of Re 1 thereafter.

Nippon India Nifty Auto ETF will invest primarily in stocks comprising the Nifty Auto Index in the same proportion as the index. It will provide exposure to the top 15 companies (according to the Nifty Auto Index methodology) representing automotive related sectors such as 4 wheelers, 2 & 3 wheelers, automotive accessories and tires.

The ETF will reflect the behavior and performance of the automotive sector. It will be compared to Nifty Auto TRI. The investment objective of the program is to provide returns that closely correspond to the total returns of the securities represented by the Nifty Auto Index before expenses, subject to tracking error.

Speaking at the launch, Hemen Bhatia, Head of ETF, Nippon India Mutual Fund, said, “Nippon India Nifty Auto ETF, which is the first automotive ETF to be launched in India, will provide a simple and Inexpensive (in terms of total expense ratio) portfolio building block to participate in the automotive sector.

“With most of the headwinds like semiconductor supply constraints as well as rising commodity prices behind us and with the street view shifting from fear of electrification to vision of the electric vehicle (VE) as an opportunity, investors will also be exposed to the EV theme, as well as part of the overall automotive sector exposure.

Dolores W. Simon