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The Indian automotive industry is undergoing a seismic shift. Electric vehicles (EVs) are rapidly gaining traction, driven by government initiatives, rising fuel prices, and growing environmental consciousness. This transformation extends beyond just EVs, encompassing new-age technologies like autonomous vehicles, connected car solutions, and alternative fuels like hydrogen.
Recognizing this potential, Mirae Asset Mutual Fund is poised to launch India's first Exchange Traded Fund (ETF) dedicated to the EV and new-age automotive sector – the Mirae Asset Nifty EV and New Age Automotive ETF.
Commenting on the upcoming NFO, Mr Swarup Anand Mohanty, Vice Chairman and CEO, Mirae Asset Investment Managers India Pvt. Ltd. said, "With the launch of India’s first ETF focused on the Electric Vehicles and New Age Automotive segment, we aim to offer investors a unique opportunity to participate in the future of mobility. We aim to provide avenues for long-term capital appreciation while supporting sustainable development in the automotive sector. This ETF underscores our commitment to innovation and aligning investment opportunities with evolving market trends.”
[Read: Top 5 Mutual Funds with High Exposure to EV Revolution]
Key Details of the NFO:
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It will be an open-ended scheme replicating/tracking Nifty EV and New Age Automotive Total Return Index
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The fund aims to offer investors long-term capital appreciation opportunities by investing in the equity of companies that are at the forefront of the dynamic and rapidly evolving automotive sector and the entire value chain
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The New Fund Offer (NFO) for Mirae Asset Nifty EV and New Age Automotive ETF will open for subscription on June 24, 2024 and close on July 05, 2024
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In the scheme, the minimum initial investment during NFO will be Rs 5,000, with subsequent investments being multiples of Re 1 thereafter
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The fund managers for the scheme will be Ekta Gala and Akshay Udeshi
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Given the scheme is an Exchange-Traded Fund (ETF) the entry and exit load will be nil. Currently the scheme does not offer and options or plans
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Under normal circumstances, the scheme will invest 95-100% in securities included in the Nifty EV and New Age Automotive Index and 0-5% in money market instruments including tri-party repo/ debt securities, instruments and/or units of debt/liquid schemes of domestic mutual funds.
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The scheme will be benchmarked against Nifty New Age and Automotive Total Return Index. The index will seek to capture companies participating in emerging segments like electric vehicles, hybrid vehicles, battery manufacturing etc. across sectors and market cap segments, but will also intend to capture initiatives and possibly future disruptions like hydrogen-fuel cell and autonomous vehicles etc. The index will be reconstituted semi-annually and rebalanced on a quarterly basis.
[Read: Top 5 Green Energy Mutual Funds: Powering Your Portfolio with Sustainability]
By investing in an ETF, investors gain exposure to a basket of companies within the EV and new-age automotive sector. This reduces risk compared to picking individual stocks. ETFs offer a cost-effective way to gain diversified exposure to a specific sector.
The EV market is expected to witness significant growth in the coming years, offering the potential for long-term capital appreciation. However, one must consider that the EV segment is still at a nascent stage in India and its growth trajectory may face short-term fluctuations.
The Mirae Asset Nifty EV and New Age Automotive ETF represents a pioneering step in the Indian financial landscape. While this ETF offers a compelling opportunity for investors seeking long-term growth in the exciting world of electric and new-age automotive technologies, careful consideration of the associated risks is essential.
Following approval from SEBI, the Mirae Asset Nifty EV and New Age Automotive ETF has secured its place as India's first ETF dedicated to the electric vehicle and new-age automotive sector.