Nippon India AMC launches India’s first automobile ETF

The new fund offer will open on January 5, 2022, and close on 14 January 2022, and the minimum investment amount required is Rs 1,000.

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Nippon India Asset Management Limited (NAM India) said on Monday, the company launched India’s first auto sector exchange-traded fund Nippon India Nifty ETF.

The new fund offer will open on January 5, 2022, and close on 14 January 2022, and the minimum investment amount required is Rs 1,000 for both Systematic Investment Plan (SIP) and in the lump-sump method. Thereafter an investor can add multiples of Re 1.

The company said the fund will invest in stocks comprising of Nifty Auto Index in the same manner as the index adding that it will provide exposure to the Top 15 (as per Nifty Auto Index methodology) representing auto-related sectors like 4 wheelers, 2 and 3 wheelers, ancillary units and tyre making companies.

The 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.

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,” said Hemen Bhatia, head ETF, Nippon India Mutual Fund.

“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,” added Bhatia.