The Navi Mutual Fund, which is backed by former Flipkart founder Sachin Bansal, aims to create an electric vehicle fund. Navi Mutual Fund has filed a scheme information document with the Securities and Exchange Board of India (SEBI) for over ten new mutual fund schemes, including an electric vehicle fund and Driving Technology FoF.
The majority of papers were filed for passively managed funds. A passively managed fund is basically a self-managed fund in which a manager buys and holds securities from a benchmark portfolio. Moreover, compared to actively managed funds, passively managed funds are more tax-efficient for investors.
The Fund of Fund (FoF) will monitor the performance of the STOXX Global Electric Vehicles & Driving Technology NET Index, which includes firms engaged in the manufacturing of electric vehicles and assisted driving technologies.
According to the draft NFO papers, the funds will be allocated to provide long-term capital growth by investing in units of overseas ETFs and/or Index Funds that invest in EV and driving technology. Furthermore, it indicated that there is no guarantee that the scheme’s investment objective will be fulfilled.
Navi Mutual Fund, which just got SEBI’s clearance, is planning to introduce a number of new schemes for investors, ranging from providing access to Vanguard ETFs to the Chinese equity market. The mutual fund seeks to revolutionize the mutual fund market by lowering fees and focusing on offering investors additional passive investment fund options.
Girish Raj, DVP of fund management at Navi Asset Management, will handle the scheme, as he has previously managed the Navi 3 in 1 Fund (Equity Portion), Navi Long Term Advantage Fund, and Navi Nifty 50 Index Fund. In addition, the company has also applied for a couple of international funds, as well as the Navi Nifty India Manufacturing Index Fund, which will monitor the Nifty India Manufacturing index. The Nifty index is made up of companies in the manufacturing sector. Navi S&P 500 FoF and Navi Total China Index FoF are among the international funds.
According to market analysts, passive funds have performed better in comparison to actively managed funds in recent years, which is why they are gaining popularity among investors. Passive funds are also gaining traction in India as they are aimed to simulate the performance of an index by investing in the same stocks at the same weightage, which is a mostly automated approach.
Sachin Bansal bought Essel Mutual Funds, a subsidiary of Essel Group, in February of this year and rebranded it to Navi Mutual Fund. Following that, in June, the company announced its first-ever mutual product, Navi Nifty 50 Index Fund, an open-ended equity plan designed to replicate the Nifty50 index.
Source: SEBI Filings