Nippon Nifty Auto ETF

Nippon India Nifty Auto ETF

• Nippon India Nifty Auto ETF is an open-ended scheme offered by the Nippon India Mutual Fund House.
• The scheme invests in auto companies listed on the National Stock Exchange.
• Listed with the NSE symbol AUTOBEES, the ETF was launched on January 20, 2022.
• Himanshu Mange is the fund manager.
• As of June 30, 2024, the Assets Under Management (AUM) of the Nippon India Nifty Auto ETF Fund stood at ₹206 crore.
• Retail investors can invest in the scheme by directly buying the ETF units through a demat account with a registered broker.
• The ETF units can be bought and sold at the prevailing price during the usual market hours.

Investment Objective & Benchmark

• Nippon India Nifty Auto ETF is a passively managed fund that aims to replicate the performance of equity stocks as part of the underlying index.
• It looks to achieve its objective by investing in securities that constitute its benchmark index– the Nifty Auto Index –in the same proportion.
• A very high-risk investment instrument, the scheme is best suited for those looking at a long-term goal of wealth creation.
• With the growing size of the economy, the demand for cars and vehicles has been on the rise in India, positioning automobile companies for an upward growth trajectory.
• The ETF offers diversification of funds within the automobile sector in India.
• With the government pushing for electric vehicles (EVs), the demand for new cars is likely to pick up pace.

Asset Allocation & Portfolio Composition

• Nippon India Nifty Auto ETF's portfolio is predominantly composed of equity, making up 99.9% of the total allocation. The remaining 0.1% is held in cash and cash equivalents, with no allocation to debt.
• The sector allocation of the portfolio is heavily weighted towards the automobile and auto components sector, which constitutes 96.98% of the Net Asset Value (NAV). Capital Goods make up 2.91% of the NAV, while CCIL accounts for 0.38% of the NAV.
• The ETF predominantly invests in giant and large-cap companies, allocating over 66% of the available assets to them.
• The top holdings make up 87.37% of the ETF’s asset allocation.

Top 10 company holdings in the ETF:

• Mahindra & Mahindra: 22.26%
• Tata Motors: 18.07%
• Maruti Suzuki: 13.88%
• Bajaj Auto: 8.61%
• Hero MotoCorp: 5.63%
• Eicher Motors: 5.36%
• TVS Motor Company: 4.65%
• Samvardhana Motherson International Ltd: 4.2%
• Bharat Forge: 3.5%
• Tata Motors Ltd DVR Shares: 2.91%

In the last one year, the ETF has given a return of 70.42% compared to its benchmarked index which has given a return of 70.89%, as of July 31, 2024.

Since its inception, the ETF has given an annualised return of 40.04% to its investors as of July 31, 2024.