Navi Mutual Fund announced the launch of its sixth fund of this year, the Navi Nifty India Manufacturing Index Fund. This is India’s first index fund focusing on the manufacturing sector. It is an open-ended index fund that will seek to replicate the Nifty India Manufacturing Index, which tracks the performance of manufacturers among the top 300 companies in India.
Manufacturing is one of India’s high-growth sectors, which has been buoyed by the government’s constant support to strengthen the sector. The ‘Make in India’ initiative, Production Linked Incentive (PLI) Scheme, and the Skill India initiative are a few of the programmes that aim to put India on the world map as a global manufacturing hub. Foreign Direct Investment (“FDI”) policy initiatives aimed at reducing restrictions have led to an increase in foreign investment. FDI in the manufacturing sector increased by 25% to $16.3 billion(2) in 2021.
Navi Nifty India Manufacturing Index Fund aims to simplify investing in the Indian manufacturing sector. It will provide easy and cost-effective access to the entire manufacturing landscape through an index that is well diversified across sectors and market caps. Investors would gain exposure to not just the leaders of the sector but also to growth in upcoming sectors like electric vehicles, semiconductors, defense, etc., among others. The largest sectors in the Nifty India Manufacturing Index currently are Automobile & Auto Components, Capital Goods, Healthcare, and Metals & Mining. It also has a well-balanced representation, with the top 10 stocks constituting only ~37% of the index. The index has delivered attractive average annual returns in the past – 8.9%, 24.5%, 9.6%, 14.5%, and 14.3% CAGR over the last 1, 3 , 5 , 10 years and since its inception in 2005, respectively(3) which indicates that over the last 10 years the index is up 3.9 times from its original level.
Sachin Bansal, Co-Founder of Navi Group, said “The launch of the Navi Nifty India Manufacturing Index Fund is yet another example of Navi’s focus on innovative, cost-effective and simple investment products. Manufacturing is an important part of the Indian economy and we are glad to offer a product that allows our customers to play a part in that story.”
Navi Mutual Fund’s NFO opens on August 12th, 2022 and closes on August 23rd, 2022.This fund proposes a Total Expense Ratio of 0.15% and 1% for the direct plan regular plan respectively. Investors can invest through numerous online platforms like Groww, Ind Money, Kotak Cherry, ICICI Direct, Paytm Money, Kuwera, Finity, Black by Cleartax, and MF Utility or by contacting their financial advisors.