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    Navi Mutual Fund's NFO opens for subscription today: Key things to know

    Navi Mutual Fund's NFO opens for subscription today: Key things to know

    Navi Mutual Fund's NFO opens for subscription today: Key things to know
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    By CNBCTV18.com  IST (Published)

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    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.

    Navi Mutual Fund's sixth fund of this year - the Navi Nifty India Manufacturing Index Fund- has opened for subscription today. This is India’s first index fund focusing on the manufacturing sector.
    This new fund offer (NFO) will close on August 23, 2022.
    About the fund
    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.
    (Source: Navi Mutual Fund)
    This fund proposes a total expense ratio of 0.15 percent and 1 percent for the direct plan and regular plan respectively. Investors can invest through numerous online platforms or by contacting their financial advisors.
    Why investors should choose this?
    According to the fund house, the NFO 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.
    Why manufacturing?
    Manufacturing is one of India’s high-growth sectors, which has been buoyed by the government's constant support to strengthen the sector, the fund house said.
    "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 percent to $16.3 billion(2) in 2021," it said.
    The largest sectors in the Nifty India Manufacturing Index currently are automobile and auto components, capital goods, healthcare, and metals and mining. It also has a well-balanced representation, with the top 10 stocks constituting only ~37 percent of the index. The index has delivered attractive average annual returns in the past – 8.9 percent, 24.5 percent, 9.6 percent, 14.5 percent, and 14.3 percent CAGR over the last 1, 3 , 5 , 10 years and since its inception in 2005, respectively which indicates that over the last 10 years the index is up 3.9 times from its original level, it said.
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