Key Points
- Nippon India Mutual Fund launched two passive funds that track the Nifty Auto and Nifty Realty indices.
- The funds aim to offer low-cost investment options, diversification, and transparency.
- The auto sector makes up 7% of India’s GDP, and the real estate sector also contributes 7%, with both sectors providing significant jobs.
- Both indices have outperformed the Nifty 50 in recent years.
- Government support is helping both the automotive and real estate sectors grow.
- The NFOs for these funds close on November 28.
Looma News
Nippon India Mutual Fund has introduced two new passive funds that will track the Nifty Auto and Nifty Realty indices. These funds will invest in the companies included in these indices, offering investors a low-cost, diversified, and transparent way to invest. Passive funds are designed to mirror the performance of their indices, making them a simple and efficient investment choice.
The auto sector, which accounts for 7% of India’s GDP, includes a wide range of industries like passenger vehicles, commercial vehicles, two-wheelers, three-wheelers, and automotive parts. The government has launched several initiatives, including the Production Linked Incentive scheme, the Automotive Mission Plan, and PM E-Drive, to boost the sector, especially in the growing Electric Vehicle (EV) market. The Nifty Auto Index has had a strong performance, with a 49% Compound Annual Growth Rate (CAGR) over the last year, compared to 28% for the Nifty 50 by the end of October. The Nifty Auto Index has also outperformed the Nifty 50 over the past three and five years.
The real estate sector, which also makes up 7% of India’s GDP, plays a big role in employment, providing 18% of all jobs. The sector is expected to grow significantly, with its contribution to GDP expected to rise to 11% by 2034. The Nifty Realty Index has shown a 66% CAGR over the past year, more than doubling the Nifty 50 TRI performance during the same period. The Nifty Realty Index has outperformed the Nifty 50 across three, five, and ten-year periods.
Arun Sundaresan, Head of ETF at Nippon India Mutual Fund, explained that the growth of both sectors is supported by government policies, rising income levels, urbanization, a growing middle class with higher purchasing power, and better access to financing.
The New Fund Offerings (NFOs) for these two funds will close on November 28, giving investors the chance to invest in these high-growth sectors.
