On June 24, 2024, Mirae Asset commenced its New Fund Offer (NFO) for its brand-new open-ended scheme, the Mirae Asset Nifty EV and New Age Automotive ETF. The goal of this cutting-edge ETF is to mimic and follow the New Age Automotive Total Return Index and Nifty EV’s performance. This NFO is open to investors through July 5, 2024.
On July 11, 2024, the plan will resume for continuous sale and buyback after a brief hiatus. The ETF will be listed on the NSE and BSE in five business days after it is allotted, increasing accessibility for investors hoping to profit from the expanding electric car and modern automobile sectors. Ms. Ekta Gala and Mr. Vishal Singh, the ETF’s managers, keep an eye on the portfolio to make sure it adheres to the investment goals and risk guidelines.
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Goal of Investment:
Subject to tracking error, the scheme’s investment goal is to produce returns, before expenditures, that are in line with the performance of the Nifty EV and New Age Automotive Total Return Index. The strategy makes no promises or guarantees any profits, and there’s no certainty that the investment goal will be met.
Application Information:
During the NFO Period, the minimum application and additional application amounts are Rs. 5,000 each, with further investments made in multiples of Rs. 1. Units shall be distributed in whole numbers, and any remaining sum will be reimbursed.
Allocation of Assets:
With an approximate allocation of 95% to 100%, the Mirae Asset Nifty EV and New Age Automotive ETF focus on investing primarily in equities included in the Nifty EV and New Age Automotive Index. The high-risk character of this strategic allocation is intended to capitalize on the potential rewards from the emerging electric car and new-age automotive industries. Additionally, the fund may invest up to 5% in low-to-medium-risk assets, money market instruments, debt securities, or units of domestic mutual funds’ debt/liquid schemes.
Benefits of the ETF:
The Nifty EV New Age Automotive Index includes businesses and industries that are essential to electric vehicles as well as new automotive technologies, including automation, fuel cells, and hybrid cars. This index foresees future advances like hydrogen fuel cells and autonomous vehicles in addition to covering current disruptions like electric and hybrid vehicles and battery manufacturing.
The index adheres to a balanced exposure strategy, allocating up to 40% of its total weight during rebalancing to auto manufacturers and the remaining 60% to industries such as auto ancillaries, batteries, battery chemicals, automation, and connectivity.
Furthermore, firms participating in significant government programs such as PLI (Production Linked Incentive) and FAME (Faster Adoption Manufacturing of Electric Vehicles) in the pertinent industries are included in the index.
The index provides diversified exposure to large-, mid-, and small-cap companies by design. Within the automotive manufacturing segment, it caps individual stock exposure at 8%, while other segments have a cap of 4%.
An appealing complement to any portfolio plan, the Mirae Asset Nifty EV and New Age automobile ETF may be of interest to investors looking for wide exposure to the rapidly changing field of electric and new-age automobile technologies. Keep an eye on this one; the electric vehicle (EV) sector in India is booming, and investors have reaped big gains from EV equities.
