Mutual funds bet big on electric vehicle sector, line up auto funds

Mirae Asset MF announces Nifty EV and New Age Automotive ETF, Groww files papers

Mutual funds (MFs) are launching schemes in the automobile space, latching on to the bull run in the sector and growing adoption of electric vehicles (EV).

Mirae Asset MF is launching the Nifty EV and New Age Automotive ETF on Monday. Groww MF has also filed papers with the Securities and Exchange Board of India (Sebi) for the same ETF.

On the active side, SBI MF launched the Automotive Opportunities Fund last month.

According to Mirae Asset MF, the EV adoption is expected to gather pace on the back of declining battery prices and push from the government, opening up opportunities for companies in the entire value chain.

The ETFs will track the Nifty EV and New Age Automotive index, which was launched on May 30, 2024. At present, it has 33 constituents with Mahindra & Mahindra having the highest weight at 9.69 per cent. Bajaj Auto and Maruti Suzuki are the next largest constituents with a weight of 7.2 per cent each. Apart from the automobile stocks, information technology (IT), chemicals, capital goods, oil & gas and consumer services companies are also present in the index.

“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,” said Swarup Anand Mohanty, Vice Chairman & CEO, Mirae Asset Investment Managers (India).

Auto stocks have rallied in recent months. In the past three months, the Nifty Auto index has gained 22 per cent and is up 36 per cent in 2024 so far.