India largest asset management company SBI Mutual Fund has launched a Consumption Exchange Traded Fund (ETF) that will track the Nifty India Consumption Index. The new fund offer (NFO) for ETFs opens on June 30 and will close on July 14. Through this, it will be easier to buy and sell your units on the exchanges. You need a demat and trading account in order to invest in ETFs.
The Nifty Consumption index is designed to reflect the performance of a diversified portfolio of companies representing the domestic consumption sector which includes consumer non-durable companies, healthcare, auto, telecom services, pharmaceuticals, hotels, media & entertainment. The Nifty India Consumption Index comprises 30 companies listed on the National Stock Exchange (NSE). Its top 5 constituents are Hindustan Unilever (HUL), ITC, Asian Paints, Bharti Airtel and Maruti Suzuki India. On a calendar year basis, the year to date (as of June 29, 21) the index delivered a return of 7.23%, whereas over the last year between June 30, 2020, to June 29, 2021, Nifty Consumption Index rallied 24.33%.
“We believe passive funds are gaining traction around the world and in India as well where investors would like to invest in line with an index. Investments in ETFs are beneficial for those looking to get exposure to a broad range of asset classes at a lower cost. With the addition of SBI ETF Consumption, we continue to augment our portfolio of offerings in the passive investment space, in addition to our actively managed funds. I believe SBI ETF Consumption is a good opportunity as India’s potential for domestic consumption is very large and continues to be a strong growth story,” said Vinay M Tonse, MD and CEO, SBI MF.
The minimum application amount during the NFO period is Rs 5,000, thereafter it will be in multiples of Re 1. The Fund Manager for SBI ETF Consumption is Harsh Sethi who also manages SBI ETF IT and SBI ETF Private Bank.
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