SBI Mutual Fund will launch an exchange-traded fund (ETF) tracking the BSE India Defence Index, with the new fund offer (NFO) open for subscription from October 13 to October 19.
The SBI BSE India Defence ETF is an open-ended scheme that will seek to track the total returns of the underlying index, subject to tracking error. Its returns will depend on the performance of the index and may differ from it because of tracking error.
The scheme will invest 95% to 100% of its assets in securities included in the BSE India Defence Index. The remaining up to 5% may be invested in government securities, including government securities (G-Secs), state development loans (SDLs) and treasury bills, as well as triparty repo and units of liquid mutual funds.
The minimum investment during the NFO is ₹5,000, with additional investments permitted from ₹1,000. Both amounts can be increased in multiples of ₹1.
Viral Chhadva will manage the scheme. He has been associated with SBI Mutual Fund since December 2020 and oversees several passive investment offerings.
As an index-tracking fund, the ETF will provide exposure to securities represented in the defence index rather than follow an actively managed stock-selection strategy. Investors will remain exposed to fluctuations in the underlying stocks and the broader sector.
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Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.