New fund offering from ICICI Prudential Mutual Fund: India’s first Nifty Auto Index Fund. Check details
ICICI Prudential Nifty Auto Index Fund (NFO) fund details: ICICI Prudential Mutual Fund announced today (September 21, 2022) the launch of the ICICI Prudential Nifty Auto Index Fund, which will give investors the opportunity to benefit from the expected growth in the automotive sector, including the electric vehicle segment.
In a statement, ICICI Pru MF said it was India’s first auto index fund that will attempt to replicate the Nifty auto index which has risen more than 14% annually since August 2012.
“In terms of volume, by 2030 India is expected to be the world’s third largest automotive market. We believe through ICICI Prudential Auto Index Fund; investors will be able to tap into the evolving space of the Indian automotive industry. With India being an emerging global hub for automotive component supply coupled with government support for e-mobility, we believe this space is likely to be in the spotlight,” said Chintan Haria, Head of development and product strategy, ICICI Prudential Mutual Fund. the launch of the index fund.
Also Read: SBI MF Launches 3 Target Maturity Funds to Offer Indexing Benefits and Tax-Efficient Yields.
Smart Auto Index Performance
ICICI Pru MF said Nifty Auto TRI has outperformed Nifty 50 TRI 7 times through August 31, 2022. The index has grown 14.21% annually since August 2012. 3 77,713.6 by the end of August 2022,” the mutual fund company said based on ICRA Online Ltd’s MFI Explorer tool.
The release further states that Nifty Auto Index reflects the behavior and performance of the automotive segment of the financial market. The offering universe is Nifty 500. No individual stock should exceed 33% and the weights of the top 3 stocks combined should not exceed 62% at the time of rebalancing.
The index is rebalanced semi-annually in March and September respectively.
Key points to know before investing
- Past performance of any mutual fund or index should not be taken as a guarantee that it will also repeat performance in the future.
- According to SEBI’s Riskometer, ICICI Pru MF’s new auto index fund falls into the “very high” risk category.
- The scheme may benefit investors seeking long-term wealth creation.
- The increase in individual income has the potential to grow and boost the automotive industry. The electric vehicle market is expected to grow at a CAGR of 49% between 2022 and 2030 and is expected to reach 10 million annual unit sales by 2030
- The government aims to develop India as a global manufacturing hub and research and development (R&D) hub
- Under NATRiP, the Indian government plans to set up R&D centers at a total cost of US$388.5 million to bring the industry up to par with global standards.
- Low-cost skilled labor, robust R&D centers and low-cost steel production offer great investment opportunities
- Automobile exports began to increase.
- The sector is cyclical in nature and the ICICI Prudential Nifty Auto Index Fund aims to perform when opportunities arise and market demand increases.
Also Read: NFO Alert: SBI Mutual Fund launches mid- and small-cap equity index funds. Should you invest?
The NFO will open on September 22, 2022 and will close on October 06, 2022.
(Disclaimer: The article is provided for informational purposes only on the basis of a press release by ICICI Prudential MF. Investment in mutual funds is subject to market risk. Please read the offering document and consult your financial advisor before investing)