Home / Money / Personal Finance /  Aditya Birla Sun Life MF launches Nifty IT ETF; all you need to know
Listen to this article

Aditya Birla Sun Life AMC Ltd has launched Aditya Birla Sun Life Nifty IT ETF, an open-ended exchange traded fund (ETF) that will track the Nifty IT TRI (total return index). The new fund offer (NFO) opened for subscription on Wednesday and will close on 28 October.

The minimum application amount for this fund is 500 and in the multiples of 100, thereafter, during the NFO period. The fund managers to the scheme are Lovelish Solanki and Kedarnath Mirajkar.

Commenting on the launch, A. Balasubramanian, managing director and chief executive officer, Aditya Birla Sun Life AMC, said, “Amid the pandemic, the (IT) sector demonstrated its defensive nature by reporting strong business growth and also gave stellar returns. With India being on track to become a global hub of IT, Aditya Birla Sun Life IT ETF gives investors an opportunity to tap into the growth potential of the top IT companies."

Balasubramanian, quoting a Nasscom report, added that the Indian IT sector has the potential of becoming a $350 billion industry in annual revenues by 2025.

The Nifty IT index acts as a benchmark for the performance of the Indian information technology (IT) sector and comprises 10 top companies listed on the National Stock Exchange (NSE). It is predominantly a large-cap index and is rebalanced on a quarterly basis by ensuring that no single stock is more than 33% and weightage of top three stocks cumulatively are not to be more than 62% at the time of rebalancing.

The index has delivered a return of 75.57% on a yearly basis and 27.76% on a five-year basis.

The top constituents by weightage in the index are Infosys Ltd (26.85%), Tata Consultancy Services Ltd (26.25%), HCL Technologies Ltd (9.32%), Wipro Ltd (9.15%) and Tech Mahindra Ltd (8.90%). The stocks in the index are MindTree Ltd, Larsen & Toubro Infotech Ltd, MphasiS Ltd, Coforge Ltd, and L&T Technology Services Ltd.

There are exiting ETFs available in the market that are benchmarked to Nifty IT TRI. ICICI Prudential IT ETF has asset under management (AUM of 2,974 crore, Nippon India ETF Nifty IT has an AUM of 1,181 crore and SBI ETF IT ( 1,080 crore).

Asset management companies (AMC) Indian over the last five have started focusing on passive funds, which includes index funds and ETFs.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout