NFO Alert: SBI Mutual Fund launches automotive opportunities fund — all you need to know

SBI Mutual Fund announced the launch of SBI Automotive Opportunities Fund, an open-ended equity scheme that aims to unlock the potential of automotive and allied business activities. The new fund offer (NFO) opened for subscription on Friday, May 17, and will close on May 31. 

The fund’s investment universe includes original equipment manufacturers (OEMs), auto component manufacturers, electric mobility and companies with auto export potential. The fund house, meanwhile, claims that this is an indicative list.

The classification of companies following the automotive and allied business activities will be largely guided by the Association of Mutual Funds in India’s (AMFI) basic industry classification. 

The scheme-related document lists 134 companies as investment universe, with the maximum number (85) in the category of ‘auto components & equipment’, followed by ‘castings & forgings’, which has 11 companies.

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The fund may also invest in semiconductor and electronics companies catering to auto companies. 

What kind of mutual fund scheme is this and what are the key objectives?

This is a thematic mutual fund which is aimed at generating long-term capital appreciation for unit holders from a portfolio of equity and equity-related instruments of companies engaged in automotive and allied business activities. 

How do you invest in this scheme?

The minimum application is 5,000 and in multiples of Re 1 thereafter. Those who plan to invest via SIP may invest a minimum of 500 and in multiples of Re 1.

Are there similar mutual funds in the market?

No, there are no similar mutual funds in the market.

How will the scheme benchmark its performance?

The scheme will be benchmarked against Nifty Auto TRI.

Is there any exit load to this scheme?

There is an exit load if the units are redeemed or switched out within one year of the allotment date. The exit load, in this case, would be 1 per cent of the applicable NAV. 

Who will manage this scheme?

The scheme’s fund manager is Tanmaya Desai.

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Does the fund contain any inherent risk?

The scheme’s risk-o-meter indicates a very high risk, which means that the investors understand that their principal will be at a very high risk. 

Moreover, investors are advised to consult their financial advisor to determine whether the product is suitable for them.

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Published: 17 May 2024, 07:57 PM IST

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