ICICI Prudential Mutual Fund launches Auto Index Fund


ICICI Prudential Mutual Fund has launched India’s first Auto Index Fund : ICICI Prudential Nifty Auto Index Fund. It is an open-ended index scheme replicating Nifty Auto Index. The NFO opens on September 22 and closes on October 06.

The Nifty Auto Index is designed to reflect the behavior and performance of the automobile segment of the financial market. The universe for the offering is Nifty 500. No single stock shall be more than 33% and weights of top 3 stocks cumulatively shall not be more than 62% at the time of rebalancing. The index is rebalanced semi-annually in March and September respectively.

“In terms of volume, by 2030, India is expected to be the world’s third-largest automotive market. We believe through ICICI Prudential Auto Index Fund investors will be able to tap into the evolving space of the Indian automobile industry. With India being an emerging global hub for auto component sourcing coupled with the Government support for electric mobility, we believe this space is likely to be under the spotlight,” said Chintan Haria, Head – Product Development & Strategy, ICICI Prudential Mutual Fund.

Should you invest in ICICI Prudential Nifty Auto Index Fund? According to the fund house, rising individual income has the potential to grow and boost the auto industry. The EV market is expected to grow at a CAGR of 49% between 2022-2030 and is expected to hit 10 mn-unit annual sales by 2030. The fund house says that the Government aims to develop India as a global manufacturing center and a Research and Development (R&D) hub. Under NATRiP, the Government of India is planning to set up R&D centres at a total cost of US$ 388.5 million to enable the industry to be on par with global standards. Skilled labour at low cost, robust R&D centres, and low-cost steel production provide great opportunities for investment. The sector is cyclical in nature and the ICICI Prudential Nifty Auto Index Fund aims to perform when opportunities arise and market demand rises.

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