Navi Mutual Fund (Navi MF) launched the Navi Nifty IT Index Fund on March 11, 2024 an tracking the Nifty IT Index which comprises leading IT companies in India, including major players like Infosys, TCS, and Wipro. The fund invests in IT giants based on their free float market capitalization on the National Stock Exchange of India Limited. The NFO for the Navi Nifty IT Index Fund will run from March 11, 2024 to March 22, 2024. Investors can participate in the Navi Nifty IT Index Fund starting at Rs 10. the funds will allocate 95 to 100 per cent of their portfolio in stocks constituting the tracking index and remaining in debt or money market investment.
Index funds, like the Navi Nifty IT Index Fund, offer investors exposure to a set of stocks passively tracking the performance of the underlying index. This style provides investors with exposure to an entire basket of stocks, rather than selecting individual companies. The transparency in stock selection and lower cost when compared to active funds are benefits of choosing an index fund. Navi MF claims that it has the lowest Total Expense Ratio (TER) among IT Index funds, with a Total Expense Ratio (TER) of 0.22 per cent for its direct plan. As per the AMFI TER data as of February 29, 2024, the average TER of other IT Index funds is 0.34 per cent.
Indian IT market has a competitive global advantage. Of the total global spend on IT services, out of which India procures most outsourced IT services.
The Nifty IT Index has historically delivered strong performance with a CAGR of 29.48 per cent (1-year performance), 21.49 per cent (5 years performance), 16.06 per cent (10 years performance), and 23.37 per cent (15 years performance) as of February 29, 2024. The Nifty IT Index has outperformed the Nifty 50 Index in 10 out of the past 12 fiscal years, the fund house said.
