India's first EV and new-age automotive ETF launched by Mirae Asset

India's first Exchange Traded Fund (ETF) focused on the Electric Vehicles (EV) and New Age Automotive segment has been launched by Mirae Asset Investment Managers. The 'Mirae Asset Nifty EV and New Age Automotive ETF' is an open-ended scheme which is used to replicate and track the Nifty EV and New Age Automotive Total Return Index. This offers investors an opportunity to invest in companies at the forefront of the rapidly evolving automotive sector.

Exchange Traded Funds (ETFs) are collections of funds that combine the features of mutual funds and stocks. They are used to track the performance of a particular index, sector, commodity, or basket of assets. ETFs are traded on stock exchanges, just like individual stocks, allowing investors to buy and sell shares throughout the trading day.

Mr. 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.”

There have been many groundbreaking innovations in the automotive industry in recent years. The government has also promoted the use of electric vehicles through its various schemes like
Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and the Production Linked Incentive (PLI) scheme for the automobile and battery manufacturing sectors.

The new automotive ETF

In markets such as the United States, ETFs have gained popularity as a way for investors to gain exposure to emerging industries and sectors. These ETFs focus on companies involved in innovative technologies, disruptive business models, and high-growth potential sectors. Examples of such emerging industries include electric vehicles, renewable energy, artificial intelligence, biotechnology, and e-commerce.

The new ETF looks 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.

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.