Mutual Fund News : SBI Mutual Fund Introduces SBI ETF Consumption

Publish Date:

SBI Mutual Fund has launched a new scheme - SBI ETF Consumption.

It is an open ended Exchange Traded Fund that will track the Nifty India Consumption Index.

Accordingly, the investment objective of the scheme is to provide return that closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.

However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.

Under normal circumstances the scheme will invest 95% to 100% of its assets in Securities covered by Nifty India Consumption Index, with upto 5% in Equity Derivatives. A very small portion (0% to 5% of its assets) may be kept in Money market instruments including Triparty repo and units of liquid mutual fund.

Accordingly, SBI ETF Consumption would invest in securities which are constituents of Nifty India Consumption Index, Money Market instruments and units of liquid mutual fund.

As per the scheme information document, SBI ETF Consumption will track Nifty India Consumption Index and will use a “passive” or indexing approach to endeavor to achieve scheme’s investment objective.

Unlike other funds, the scheme will not try to “beat” the market it tracks and do not seek temporary defensive positions when market decline or appear overvalued. The AMC does not make any judgments about the investment merit of a particular security nor will it attempt to apply any economic, financial or market analysis. Indexing eliminates active management risks with regard to over/ underperformance vis-à-vis a benchmark.

Since SBI ETF Consumption is an exchange traded fund, the scheme will only invest in the securities constituting the underlying index. However, due to changes in underlying index the scheme may temporarily hold securities which are not part of the index. For example, the portfolio may hold securities not included in the respective underlying index as result of certain changes in the underlying index such as reconstitution, addition, deletion etc.

The fund manager’s endeavor would be to rebalance the portfolio in order to mirror the index; however, there may be a short period where the constituents of the portfolio may differ from that of the underlying index.

These investments which fall outside the underlying index as mentioned above shall be rebalanced within a period of 7 days.

SBI ETF Consumption’s performance will be benchmarked against Nifty India Consumption TRI (Total Return Index).

SBI ETF Consumption will be managed by Mr Harsh Sethi.

The NFO opens for subscription on June 30, 2021 and closes on July 14, 2021. The scheme will reopen for continuous sale and repurchase within 5 Business Days from the date of allotment.

The fund’s NAV is priced at Rs 10 per unit during the NFO period. The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.

The units of the Scheme can be bought / sold on all trading days on the NSE or other stock exchange where the Scheme is proposed to be listed.