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Mirae Asset Investment Managers (India) Pvt. Ltd on Thursday launched India’s first exchange-traded fund (ETF) tracking Nifty financial services index that will provide exposure to 20 companies representing various segments of the financial services sector.

The new fund offer for Mirae Asset Nifty Financial Services ETF will close for subscription on 29 July. The scheme is an open-ended one replicating or tracking Nifty Financial Services Total Return Index.

The financial services sector encompasses not only banks but other industries such as NBFCs (non-banking financial companies), insurance and capital markets, among others.

Top constituents by weightage of Nifty financial services index as of 30 June are HDFC Bank (24.41%), HDFC Ltd (16.67%), ICICI Bank Ltd. (16.31%), Kotak Mahindra Bank Ltd. (9.35%), Axis Bank Ltd. (7.19%), State Bank of India (6.01%), Bajaj Finance Ltd. (5.97%), Bajaj Finserv Ltd. (2.73%), HDFC Life Insurance Company Ltd. (2.12%) and SBI Life Insurance Company Ltd. (1.66%).

Nifty financial services index has generated an annualized return of 18.3% as of 30 June compared with 15.1% by Nifty Index and 14.6% by Nifty Bank index in the last five years.

The ETF will have a total expense ratio of just 13 bps and will be listed on both the National Stock Exchange of India (NSE) and BSE where liquidity shall be created by the market maker appointed by the asset management company (AMC).

The minimum initial investment in the scheme during the NFO period will be 5,000 and multiples of Re 1 thereafter.

“While the financial services sector has grown at a great pace and financial inclusion across the board has improved, we still have a long way to go to reach even global averages. With the advent of new products and services backed by innovative technology, the scope of financial services is tremendous in coming years, which makes it a very compelling sector to take exposure in," said Swarup Mohanty, chief executive officer, Mirae Asset Investment Managers (India)Pvt. Ltd.

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