Aditya Birla Sun Life AMC has announced the launch of an ETF tracking the Nifty Financial Services TRI to help investors capture the growth opportunity across the spectrum of financial services. The Aditya Birla Sun Life Nifty Financial Services ETF will be available for subscription from 14 July 2022 to 27 July 2022.
The Nifty Financial Services Index is a well-diversified portfolio that goes beyond conventional banking and includes insurance, wealth management, stock broking, payment platforms, etc. This Index is home to 20 of the top financial services’ companies listed in India. Primarily a large cap index, it has given reasonable double digit returns over both 5 and 10 years investing periods.
A crucial sector for the economy, Financial Services sector covers Banks, NBFCs, Insurance companies, AMCs and other financial institutions. These companies are omnipresent and are required at each stage of life and business. There is an ever-growing need for Financial Services during every stage of life be it in the early income stage or retirement phase. The financial services sector, including banks, has had significant valuation derating over the past 2 years. Given the sector’s strategic significance in the Indian markets and the expected comeback in terms of valuations, this ETF represents a strong opportunity for growth.
The Nifty Financial Services Index comprises of 20 stocks. The Nifty Financial Services TRI includes banks, financial institutions, housing finance, insurance companies and other financial services companies.
The number of stocks in Nifty Financial Services TRI is low and hence the concentration on a few stocks could be significantly high. Due to such sector and stock specific concentration the Scheme could be exposed to higher levels of volatility and market risk than would generally be the case in a more diverse fund portfolio of equity Securities
Commenting on the launch, A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC said, “Given the recent volatility, many investors are now resorting to passive products that will provide them with the option to take underlying index exposure in various segments of the market at low costs. This ETF presents a unique investment opportunity in light of the significance of the BFSI sector.”