Navi Nifty Bank Index Fund (NFO Details 2022): Navi Mutual Fund on Monday (January 17, 2022) announced the launch of Navi Nifty Bank Index Fund. It is an open-ended equity scheme that will replicate the Nifty Bank Index. Some of the top constituents of Nifty Bank Index are HDFC Bank, ICICI Bank, State Bank of India, Kotak Mahindra Bank and Axis Bank.
In a statement, Navi MF said this index fund offers investors a “cost-effective way” to invest in the most liquid and large banking stocks of the country. The scheme comes with an expense ratio of 0.12% for the direct plan.
The NFO will open on January 17 and close for subscriptions on January 31.
Nifty Bank Index offers exposure to 12 stocks from the banking sector including 10 private and 2 PSU banks which capture 88% of the market capitalization of all the listed banks.
Nifty Bank Index 10-year CAGR
The Nifty Bank Index has achieved attractive returns over the long term. Its 1 year, 5 year and 10 year CAGR are 14%, 12.5% and 16.9% respectively, according to the statement.
The statement further said that while the Nifty Bank Index underperformed in the broader market since the start of the Covid outbreak in early 2020, with healthy balance sheets of banks and corporates, the sector is expected to capture cyclical uptick in growth.
The Nifty Bank TRI has also outperformed the Nifty 50 TRI in 6 out of the last 10 years till FY21.
Top Nifty Bank Index constituents
As of December 31, 2021, the top 5 constituents of the Nifty Bank Index were HDFC Bank Ltd (27.8%), ICICI Bank Ltd (22.62%), Kotak Mahindra Bank Ltd (11.61%), Axis Bank Ltd (11.52%) & State Bank of India (11.45%).
“India’s aim to become a US$ 5 trillion economy will be driven by significant expansion and growth in our banking sector over the next few years. This sector is clearly poised for growth and Navi’s Nifty Bank Index Fund provides an opportunity for investors to participate in this growth journey,” a Navi MF spokesperson said.
(Mutual fund investments are subject to market risks. Please consult your financial advisor before making any investment decision)