Charge Up Your Portfolio: A Look at the Groww Nifty EV & New Age Automotive ETF

HT Brand Studio

The automobile sector in India is on an electrifying growth trajectory, powered by electric vehicles (EV). EV sales in India breached the 1.5 million mark for the first time in 2023, marking a 50% increase from the previous year. It is also expected that the EV sales  will have a Compound Annual Growth Rate (CAGR) of 35 per cent with annual volumes likely to touch 27.2 million units by 2032. 

With this expected growth in the sector on the back of governmental support, Groww Mutual Fund has newly launched Groww Nifty EV & New Age Automotive ETF which can be your ally to make the most of the EV boom.

Understanding ETFs

An exchange-traded fund (ETF) is a collection of securities that track a specific index or seek to outperform it. An ETF includes financial assets such as stocks, bonds, currencies, debts, futures contracts, and even commodities such as gold bars.

Due to their convenience and affordability, ETFs have grown in popularity. They trade like stocks on exchanges, offering greater flexibility compared to traditional mutual funds. For instance, while mutual funds only trade once a day after the market closes, ETFs trade throughout the day on a stock exchange. Meaning the investor can buy or sell the ETF intraday at different prices.

The Nifty EV and New Age Automotive Index

Groww Nifty EV & New Age Automotive ETF allows you to invest in a diversified portfolio of companies within the Indian EV space, as it tracks the Nifty EV and New Age Automotive Index.

This index, comprising 33 EV stocks, serves as the roadmap for the ETF. It tracks the performance of companies which are actively involved in electric vehicles or new age automotive vehicles segment. The index includes leading Indian companies across the EV ecosystem, encompassing manufacturers, battery producers, component suppliers, and other relevant businesses. 

Launched in 2018, reconstituted semi-annually and rebalanced on a quarterly basis, the index has given a return of 22% since its inception. However, the right time to invest in the index via the ETF by Groww is now as the index has been giving 34% returns over the last 5 years with a whopping 62% return last year.

By investing in the Groww Nifty EV & New Age Automotive ETF, you gain exposure to the diverse players driving the EV revolution in India and giving handsome returns in the process.

The EV Market in India

The Indian EV market is accelerating at an electric pace with the government projecting a fully electric automobile market by 2035. State subsidies on EV purchases are helping fuel demand while the ever-improving EV infrastructure in the country is increasing overall adoption of electric vehicles.

The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Scheme under the National Electric Mobility Mission, is India’s flagship EV scheme that is driving the growth of the sector. The current phase of the scheme, having a budget of ₹10,000 crores, is focused on the electrification of public and shared transportation. Through the scheme, the government is also providing incentives to EV manufacturers and subsidies to EV buyers, facilitating both supply side and demand side growth. To ensure that the country is able to absorb the effects of the expected EV growth, the Indian government plans to set up 10,000 public charging stations across the nation by 2025. 

While the recently presented Union Budget 2024 did not include any specific measures for the EV sector, there is still good news for the industry players. It has been announced that the critical minerals such as lithium, copper, cobalt, and rare earth elements will now be exempt from custom duties. As lithium is a key element in producing batteries that power electric vehicles, cheaper lithium prices will provide a major boost for the EV sector. Lower production costs will ultimately result in EVs becoming a more economically viable option for consumers as well.

Jumping on the Electric Bandwagon

All of this is to say that the time is ripe for you to enter into the EV investing space with the Groww Nifty EV & New Age Automotive ETF. The ETF is currently live as a New Fund Offer (NFO) which means you can exclusively benefit from the initial phase of the fund's growth even with a low entry point.

This ETF provides you with a pre-built basket of key companies across the EV ecosystem. Such diversification reduces the  risk by spreading your investment across various segments of the industry. It minimizes the hassle of time-consuming research and analysis before picking a stock and then sweating over its returns. Since the fund eliminates the need to buy individual stocks, it also prevents you from needing to pay hefty brokerage fees for every transaction, making the ETF a more cost-effective option.

Investing in the ETF will simplify your investment journey overall. As ETFs trade throughout the day on exchanges, anyone can buy and sell units of the ETF instantly. This provides the investor with greater flexibility and control over your investment. By tracking the Nifty EV and New Age Automotive Index, this ETF leverages the expertise of market professionals, ensuring your investment reflects growth as the EV sector continues to grow in India.

Before making any investment decisions, however, be sure to consult your financial advisor. They can help you assess your risk tolerance and financial goals better, guiding you on whether the ETF aligns with a prudent investment strategy. Remember to thoroughly review the scheme information document to understand the inherent risks and potential rewards associated with this ETF.

The NFO is available for investment on all major mutual fund investments and trading platforms and can be consulted through your financial advisor.

Investing in the Future

The Indian EV sector is packed with potential, and the Groww Nifty EV & New Age Automotive ETF offers the perfect route into this growth story. Whether you are a seasoned investor or just starting out, this ETF provides a chance to diversify your portfolio and benefit from the future of mobility.

Explore this unique investment opportunity on major mutual fund platforms or by discussing it with your financial advisor for personalized guidance.

Disclaimer: This article has been produced on behalf of the brand by HT Brand Studio. The content is for information purposes only and does not constitute financial advice.