Nippon India Mutual Fund has announced the launch of two new funds in the passive space. These new fund offers (NFO) are based on auto and realty themes. Both the funds are open-ended index funds, with their NFO opening on November 14, 2024 and closing on November 28. Nippon India Nifty Auto Index Fund is a passive fund that will track the performance of the Nifty Auto Index. Whereas Nippon India Nifty Realty Index Fund will follow the Nifty Realty Index.
Will invest in index securities
Since both of these are passive funds, they will invest in the securities of their respective underlying indexes. Being passive, these funds have some benefits for investors – like lower costs, diversification through a single unit and transparency, as both the funds will mimic their respective indexes.
There are good opportunities in the auto sector
India's automobile sector contributes 7.1% to the country's gross domestic product (GDP). The industry is diverse, including passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and automotive component manufacturers. Demand for electric vehicles (EVs) is rising, driven by government incentives, falling battery costs and rising petrol and diesel prices. The share of EVs in India's auto sector is expected to reach 40% by FY 2030, which will lead to the growth of the auto sector.
48.7% CAGR in 1 year
Nifty Auto Index TRI has given a CAGR of 48.7% in the last one year, while Nifty 50 TRI has given a CAGR of 28.3% till October 31, 2024. Nifty Auto TRI has outperformed Nifty 50 TRI over 3 and 5 year periods.
Good growth in real estate also
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