Mirae Asset launches ETF tracking Nifty Financial Services Index
Mirae Asset Investment Managers (India), with an asset under management (AUM) of Rs 77,674 crore at the end of June 2021 launched India’s first ETF tracking Nifty Financial Services Index. It is an open-ended ETF tracking Nifty Financial Services Total Return Index. The new fund offer (NFO) will open for subscription on July 22, 2021, and close on July 29, 2021. The minimum initial investment in the scheme during the NFO period will be Rs 5,000 and multiples of Re 1, thereafter.
Mirae Asset Nifty Financial services ETF will provide exposure to 20 companies, representing various segments of the financial services sector including banks, non-banking financial company, insurance, and capital market. The index has generated a return of 18.3 per cent annualised return compared to 15.1 per cent by Nifty 50 index and 14.6 per cent by Nifty Bank index in the last five years at the end of June 2021. The ETF will have a total expense ratio of just 13 bps and will be listed on both, National Stock Exchange (NSE) as well as Bombay Stock Exchange (BSE), where liquidity shall be created by the market maker, appointed by the asset management company (AMC). The stated expense ratio is slightly lower than the 16 bps median expense ratio of the current equity ETFs at the end of June 2021.
Mirae Asset has signalled a strong push towards passively managed exchange-traded funds (ETFs). After launching multiple ETFs over the past few years, the fund house explicitly spelled out its push for passive funds. They want investors to take underlying index exposure in various segments of the market at a low cost. In this effort, they are now launching Mirae Asset Nifty Financial Services ETF.