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Nippon India MF launches India’s first Auto ETF



Nippon Life India Asset Management Limited, asset manager of Nippon India Mutual Fund (NIMF), has announced the launch of India’s First Auto sector ETF – Nippon India Nifty Auto ETF. The Auto ETF is an open-ended scheme tracking the Nifty Auto Index.

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 & 3 wheelers, Auto Ancillaries, and Tyres.

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. However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved.

The new fund offer (NFO) will open on January 5, 2022 and close on January 14, 2022. The minimum investment amount required during New Fund Offer (NFO) is Rs 1,000 and in multiples of Re 1 thereafter.

Speaking at the launch, Hemen Bhatia, Head ETF, Nippon India Mutual Fund said, “Nippon India Mutual Fund has been at the forefront of a very fast-growing industry, establishing one of the most robust and differentiated ETF platforms in India. 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. It is an honour to play a critical role in helping so many investors achieve their investment goals,” he added.  

Nippon India Mutual Fund (NIMF) is the one of the largest ETF player in India with an AUM of more than Rs. 500 billion as on November 30, 2021. It has one of the most comprehensive ETF bouquets comprising of 23 ETFs in the industry across Equities, Debt and Commodity. With over 65 lakh folios in ETFs as on November 30, 2021, NIMF has a market share of 60 per cent.

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