Want to make money from EV boom? ICICI Prudential launches Nifty Auto ETF – Check features

ICICI Prudential’s Nifty Auto ETF will provide investors with exposure to many large-cap companies which are focused on producing Electric vehicles∙

ICICI Prudential Nifty Auto ETF
Representative image

ICICI Prudential Mutual Fund has launched an auto sector ETF. The ICICI Prudential Nifty Auto ETF aims to provide returns that closely correspond to the total return of the benchmark Nifty Auto Index subject to tracking errors, the fund manager said in a statement.

ICICI Pru’s Auto ETF will provide investors with exposure to many large-cap companies which are focused on producing Electric vehicles∙

“The Sector is cyclical in nature and the ETF aims to perform when opportunities and market demand rise,” the statement said.

It is expected that the auto industry will witness positive sales post the pandemic supported by rising individual income∙ “Some of the factors which augur well for the sector is the growing average household income leading to higher purchasing power, availability of skilled labour at relatively lower cost, presence of robust research and development centres aiding in sector growth and supportive Government policies for boosting electric mobility in the country,” the statement said.

NFO details

  • Key dates: NFO opens 5th January 2022 and closes on 10th January 2022.
  • Minimum amount: Rs 1000 and in multiples of Re 1 thereafter during NFO period.

Commenting on the NFO, Chintan Haria, Head – Product Development and Strategy, ICICI Prudential Mutual Fund said, “We believe through ICICI Prudential Nifty Auto ETF, investors will be able to tap into the evolving space of the Indian automobile industry. With India being an emerging global hub for auto component sourcing coupled with the Government support for electric mobility, we believe this space is likely to be under the spotlight.”

What is the Nifty Auto index?

The Nifty Auto Index has been designed to reflect the behaviour and performance of the Automobiles segment of the financial market. The universe for the offering is Nifty 500. No single stock can be more than 33% and weights of the top 3 stocks cumulatively can not be more than 62% at the time of rebalancing. The index is rebalanced semi-annually in March and September respectively.

Who should invest?

The scheme may be suitable for investors looking for long-term wealth creation through an Exchange Traded Fund that aims to provide returns closely corresponding to the returns provided by Nifty Auto Index, subject to tracking error.

Mutual fund investments are subject to several risks. Investors should consult financial advisors to find whether the product is suitable for them or not.

NIMF has also announced the launch of its first auto ETF.

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