SBI Mutual Fund has launched its new thematic fund – SBI Automotive Opportunities Fund. The new fund is an open-ended equity scheme following automotive and allied business activities theme. The fund has opened for subscription on May 17 and will close on May 31, 2024.
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Investment objective
The fund has been launched with an objective to generate long-term capital appreciation to unit holders from a portfolio that is invested in equity and equity-related instruments of companies engaged in automotive & allied business activities theme from the domestic and global universe. The fund would be benchmarked to the Nifty Auto TRI.
“The investment objective would be to generate long-term capital appreciation to unit holders from a portfolio that is invested in equity and equity related instruments of companies engaged in automotive and allied business activities from the domestic as well as global universe,” SBI Mutual Fund said in a statement.
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Investment strategy
The fund would mainly invest 80-100% of its assets in equity and equity-related instruments of companies engaged in automotive and allied business activities theme (including equity derivatives), with the balance assets as per the following allocation:
(a) 0–20% in equity and equity-related instruments of companies other than above (including equity derivatives)
(b) 0–20% in debt and debt-related instruments (including securitized debt {upto 20%} and debt derivatives) and money market instruments including tri-party repos
(c) 0–10% in units issued by REITs and InvITs, with the exposure in line with SEBI limits specified from time to time.
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The fund may also look into investment opportunities in foreign securities including ADR/GDR/Foreign equity and debt securities and overseas ETFs subject to regulations. Such investment may not exceed 35% of the net assets of the scheme and will be in line with the maximum limits available from time to time, the fund house said.
The Indian Automotive sector presents an attractive opportunity as domestic demand and auto exports have been drivers of growth, Shamsher Singh, Managing Director & Chief Executive Officer, SBI Funds Management, said while sharing his review about the fund.
“Electric mobility and rise of logistics & passenger transportation provide inflection points for the industry. The SBI Automotive Opportunities Fund is a wonderful opportunity for investors who would like to benefit from the growth of the entire automotive ecosystem as this sector is poised to take India to new places.” he said.
D P Singh, Deputy MD & Joint CEO, SBI Funds Management, said policy reforms and a defined roadmap with the industry will provide momentum and an opportunity for investors to benefit from India’s growing automotive ecosystem.
“The Indian Automotive Industry is running in top gear as our country is a force to be reckoned in terms of production of vehicles and auto exports while our burgeoning domestic market, demands safer and premium vehicles. In addition, manufacturing of auto parts and ancillaries contribute to almost 30% of the manufacturing ecosystem providing wealth creation opportunities for investors in the long-term,” he said.
