Navi Mutual Fund launched the Navi Nifty 50 ETF on September 11, 2023, an open-ended exchange-traded fund (ETF) replicating/tracking the Nifty 50 Index.
The scheme opened for public subscription on September 11, 2023, and will close on September 15, 2023. Investors can invest a minimum of Rs 250 per plan/option under the scheme and increase their investments in multiples of Re 1. The scheme will be measured against the Nifty 50 Index TRI
An ETF, or exchange-traded fund, is a marketable security that tracks an index, commodity, bonds, or basket of assets like an index fund.
In simple terms, ETFs are funds that track indexes such as CNX Nifty or BSE Sensex. When you buy shares/units of an ETF, you buy shares/units of a portfolio that tracks the yield and return of its native index. What sets ETFs apart from other index funds is their goal of matching the performance of the respective index rather than trying to outperform it.
ETFs are passively managed to replicate a specific market index, leading to a fund management style known as passive management. They typically have lower administrative costs compared to actively managed portfolios. Administrative fees for ETFs are usually less than 0.20 per cent annually, in contrast to the over 1 per cent annual cost associated with some actively managed mutual fund schemes, according to the Association of Mutual Funds in India (AMFI).
Navi Nifty 50 ETF aims to provide returns before expenses corresponding to the underlying index's total return subject to tracking errors. Investments in nearly all the stocks constituting the Nifty 50 Index will be made in approximately the same weightage as those in the Nifty 50 Index.
In compliance with Securities and Exchange Board of India (Sebi) guidelines, the scheme intends to allocate a minimum of 95 per cent and 100 per cent of its assets in securities covered by the Nifty 50. It may also invest between zero and 5 per cent in money market instruments, including Tri-Party Repo (TREPs). From 144 ETFs shown on the AMFI website, the category average return is 15.57 per cent.
