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Nippon Life India Asset Management Limited (NAM India), asset manager of Nippon India Mutual Fund (NIMF), on Monday announced the launch of Nippon India Nifty Auto ETF.

The New Fund Offer (NFO) will open on 5 January 2022 and close on 14 January 2022 and the minimum investment amount required is 1,000. Investors can add in multiples of Re 1 thereafter.

The Nippon India Nifty Auto ETF is an open-ended scheme that will replicate the Nifty Auto Index.

The AMC said the ETF or exchange-traded fund will predominantly invest in stocks comprising the Nifty Auto Index in the same proportion as the index adding that it will provide exposure to top 15 (as per Nifty Auto Index methodology) companies representing auto-related sectors like automobiles 4 wheelers, automobiles 2 and 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.

“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," said Hemen Bhatia, head ETF, Nippon India Mutual Fund.

“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," added Bhatia.


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