Fund houses line up several passive offerings, shows Amfi data

Passive funds have been witnessing strong flows over the past few months as "new-age" investors are preferring low-cost products to active funds. To tap the opportunity in index funds and exchange-traded funds (ETFs), fund houses have lined up several products for investors.

The data from the Association of Mutual Funds in India (Amfi) shows that between June and November, ETFs and index funds collectively witnessed net inflows of around Rs 52,500 crore.

On Monday, ICICI Prudential Mutual Fund (MF) and Nippon India MF launched ‘Auto ETF’. Navi MF came out with Navi Nifty Next 50 Index Fund — an open-ended equity scheme that will replicate the Nifty Next50.

With an expense ratio of 0.12 per cent for the direct plan, Navi Nifty Next 50 Fund will have the lowest cost when compared with similar schemes in the passive fund category.

ICICI Prudential Mutual Fund's auto ETF namely ICICI Prudential Nifty Auto ETF aims at providing returns that closely correspond to the total return of the benchmark Nifty Auto index, subject to tracking errors. Even Nippon India MF announced the launch of Nippon India Nifty Auto ETF.

Chintan Haria, head-product development & strategy, ICICI Prudential Mutual Fund said: “We believe through ICICI Prudential Nifty Auto ETF, 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's support for electric mobility, we believe this space is likely to be in the spotlight.”

Market participants say that passive investing will grow even in the current calendar year as several funds plan to come out with either ETFs or index funds.