The first Exchange Traded Fund (ETF) in India dedicated to the New Age Automotive and Electric Vehicle (EV) markets has been launched, according to Mirae Asset Investment Managers. An open-ended fund called the “Mirae Asset Nifty EV and New Age Automotive ETF” gives investors the chance to put money into companies that are leading the constantly changing automotive industry by replicating and tracking the Nifty EV and New Age Automotive Total Return Index.
Investment vehicles known as exchange-traded funds (ETFs) combine the characteristics of equities and mutual funds. They are intended to monitor the performance of a specific commodity, index, industry, or asset class.
Similar to individual stocks, exchange-traded funds (ETFs) enable investors to purchase and sell shares at any time throughout the trading day.
ETFs have become more and more popular in nations like the US as a means for investors to get exposure to developing sectors and businesses. These exchange-traded funds (ETFs) concentrate on businesses in industries with strong growth potential, disruptive business strategies, and cutting-edge technologies. Emerging industries that fit this description include biotechnology, e-commerce, renewable energy, electric cars, and artificial intelligence.
Recent years have seen a dramatic shift in the Indian automobile sector, with an increasing emphasis on environmentally friendly and sustainable mobility options.
The Indian government has been actively promoting the adoption of electric vehicles through initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and the Production Linked Incentive (PLI) scheme for the automobile and battery manufacturing sectors.
Mirae Asset’s new ETF seeks to capture the potential of this dynamic industry by investing in companies involved in emerging segments like Electric Vehicles, Hybrid Vehicles, Battery Manufacturing, and more. The fund also aims to target future disruptions in the sector, such as Hydrogen-fuel cell and Autonomous Vehicles.
Swarup Anand Mohanty, Vice Chairman & CEO of Mirae Asset Investment Managers (India) Pvt. Ltd., emphasized the uniqueness of this offering, stating, “With the launch of India’s first ETF focused on the Electric Vehicles and New Age Automotive segment, we aim to offer investors a unique opportunity to participate in the future of mobility. We aim to provide avenues for long-term capital appreciation while supporting sustainable development in the automotive sector.”
The New Fund Offer (NFO) for the Mirae Asset Nifty EV and New Age Automotive ETF will open for subscription on June 24, 2024, and close on July 05, 2024. The minimum initial investment during the NFO will be Rs 5,000, with subsequent investments being multiples of Re 1.
This launch comes at a time when the Indian automotive industry is poised for significant growth, driven by increasing consumer demand, government support, and technological advancements. As per industry reports, the Indian electric vehicle market is expected to grow at a CAGR of over 40% during the period from 2021 to 2027, reaching a market size of over $150 billion by 2027.
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