ICICI Prudential Nifty Financial Services Ex-Bank ETF will invest in the Nifty 500 Index’s 30 largest financial services sector stocks, excluding banks
ICICI Prudential Mutual Fund has launched the ICICI Prudential Nifty Financial Services Ex-Bank ETF, an open-ended exchange-traded fund that will invest in the Nifty 500 Index’s top 30 financial services stocks except for banks, based on their market capitalisation.
The scheme’s new fund offer (NFO) is open from November 16-25, 2022, and the fund will track the performance of the Nifty Financial Services Ex-Bank Index.
Unveiling the fund on Wednesday, Chintan Haria, head of product development & strategy at ICICI Prudential AMC, in a press release, said the financial services sector is “poised to witness an unprecedented boom” as there is more participation in credit, investments, and insurance.
He added, “the sector is on the rise, and the road thus far has been paved by various reforms—FDI policy relaxation, tax exemptions, etc., which will further encourage industry expansion.”
Data provided by the ICICI Prudential AMC showed the mutual fund industry’s asset under management (AUM) rose from $252 billion in FY2016 to $482 billion in FY2022 (as of Oct 31, 2022) at a compound annual growth rate (CAGR) of 11 per cent.
Likewise, the non-banking financial companies (NBFC ) public funds increased from $278 billion in FY2016 to $471 billion in FY2022 at a CAGR of 9 per cent, it said, citing data from India Brand Equity Foundation (IBEF), National Stock Exchange (NSE), and MFI Explorer.
The fund house said the Nifty Financial Services Ex-Bank index outperformed both the Nifty 50 Index and Nifty Bank index over the last 10 years.
Why Invest In the Scheme?
According to the fund house, the Nifty Financial Services Ex-Bank Index is relatively less volatile than Nifty Bank Index.
Also, rising savings and investments due to the workforce shift from agriculture to industry, cheap internet data, and growing telecom spending enabled credit, insurance, and investment penetration in rural India.
As a result, there has been a surge in demat accounts, MF folios, and SIP books, leading to increased retail investments in both primary and secondary markets.