Nippon Life India Asset Management Limited (NAM India) has launched Nippon India Nifty Auto ETF , India’s first auto sector ETF.

The Auto ETF is an open-ended scheme replicating/tracking the Nifty Auto Index.

The NFO opens on January 5 and closes on January 14.

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Nippon India Nifty Auto ETF will predominantly invest in stocks comprising 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 4-wheelers, 2 & 3 wheelers, auto ancillaries and tyres, according to the fund house.

The ETF is fully designed to reflect the behaviour and performance of the automobiles sector. It will be benchmarked against Nifty Auto TRI.

The minimum investment amount required during New Fund Offer (NFO) is ₹1,000 and in multiples of ₹1 thereafter.

EV opportunity

“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”, Hemen Bhatia, Head ETF, Nippon India Mutual Fund, said.

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“With most headwinds, like supply constraints of semiconductor 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”.

Nippon India Mutual Fund (NIMF) is one of the largest ETF players in India with an AUM of more than ₹ 50,000 crore as on November 30, 2021 .

It has one of the most comprehensive ETF bouquets comprising 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.