Mirae Asset Nifty Metal ETF NFO: Date, Review & NAV

Mirae Asset Nifty Metal ETF: Complete Overview

Mirae Asset Mutual Fund launches Mirae Asset Nifty Metal ETF and Mirae Asset Nifty PSU Bank ETF, under its AMC Mirae Asset Investment Managers (India) Private Limited. Nifty Metal ETF by Mirae Asset is an open-ended scheme that aims to replicate or track the Nifty Metal Total Return Index.

The primary objective of the Mirae Asset Nifty Metal ETF is to produce returns that are in line with the Nifty Metal Index's performance, minus tracking error, before expenses.

The Mirae Asset Nifty Metal ETF NFO has a subscription amount of Rs.5000 and in multiple of Rs.1 thereafter. The new fund offer will close on September 30, 2024 and subscribers may begin participating in this Mirae Asset NFO on September 20, 2024. This mutual fund scheme will open for ongoing sale and repurchase on October 04, 2024. The plan has a very high level of risk. It is not assured that the investing objective of the program will be achieved.

The Scheme will invest 95-100% of its securities included in the Nifty Metal Index and 0-5% in Money market instruments, such as debt securities and /or Tri-Party REPO units, as well as units of domestic mutual funds' debt and /or liquid schemes.

Head of ETF Products and Fund Manager, Mirae Asset Investment Managers (India), Siddharth Srivastava said-” The Nifty Metal ETF will allow investors to take either tactical exposure based on a short-term view on metal and commodity cycle or a long-term exposure due to India’s focus on infrastructure and manufacturing.”

If you want to learn about the latest trends, insights, and news of NFO Mutual Fund you can keep reading to understand the offerings of this new NFO below:

 

Mining Industry in India

The Central Government of India established several regulations and regulatory organizations over the years, which led to the evolution of the mining industry in India.

1947: The sector saw post-independence growth under the Five-Year Plan

1956: The Indian Bureau of Mines was established, the Industrial Policy Resolution was strengthened, and the Geological Survey of India.

2024: It is anticipated that increased infrastructure spending will account for 25 to 30% of the demand for metals during the coming ten years. 

 

India as a producer of Metals

Aluminium Production:

India possesses the world's 2nd largest capability for producing aluminum.

Steel Production:

India is the world's 2nd largest producer of crude steel.

Lime Production:

The 3rd largest producer of limes worldwide is India.

Iron Ore Production:

India ranks 4th globally in terms of iron ore production.

 

Demand of Steel in India

According to the National Steel Policy (NSP) 2017 adopted by the Indian government, by 2030-2031, there would be a 300 MT (million tons) steel production capacity and 160 kg of steel consumed per person.

Given the Government's ongoing emphasis on infrastructure development, the rise in domestic steel demand in FY24-25 may be robust, at 7-8%.

 

Government Initiatives in Steel Industry

PLI Scheme:

Approved a 5-year, Rs.6,322 crore Specialty Steel expenditure.

National Steel Policy:

National Steel Policy lays forth the general plan for promoting the steel industry's long-term growth in India.

Green Steel Making:

The 13 task force was tasked with discussing, debating, and making recommendations about the steel industry's decarbonization.

PM Gati Shakti National Master Plan:

BISAG-Ns' capabilities were combined with Steel Products (Quality Control) Order to obtain insights into steel production facilities.

 

What is the Nifty Metal Index?

The goal of the Nifty Metal Index is to represent the performance and behavior of the metals industry, which includes mining. A maximum of 15 stocks that are listed on the National Stock Exchange (NSE) make up the Nifty Metal Index.

• The Nifty 500 Index Universe

Equities shall be selected from the universe of equities that form part of the Nifty 500 Index, these eligible stocks should form part of metal sector.

• Free Float Market Capitalization

Every stock has a weight based on its free float market capitalization; at the time of rebalancing, no single stock should have a weightage greater than 33%, and the weightage of the top three stocks should not total more than 62%.

• Index Rebalancing 

Weights are adjusted every quarter, and the index is reconstructed semi-annually.

• Trading History

For a company to be included in the index, its trading frequency must have been at least 90% during the previous 6 months.

 

Why Invest in the Nifty Metal Index?

• Focused Exposure to the Metal Sector

15 stocks from the National Stock Exchange-listed Indian Metals & Mining industry are included in the Nifty Metal Index. Companies engaged in the extraction, processing, and distribution of metals, such as iron ore, steel, aluminum, zinc, copper, etc., are included in the index.

• Potential

An investment of approximately Rs.30,000 Cr is expected to be made in the metal sector by increasing government incentives through the Steel PLI plan. In the next 10 years, India's infrastructural advancements are probably going to account for more than 25% of global metal consumption. Given the strong demand for metals, investors looking to get a piece of the growing Indian metal market should consider investing in the Nifty Metal Index.

• Opportunity

India is one of the top 5 producers of metals, such as iron, steel, and aluminum. Because India is focusing on infrastructure and industry, the Metal Index allows you to take on possible tactical exposure based on a short-term view and maybe a long-term play.

• Past Performance

Over the past decade, the Nifty Metal Index has performed better than the Nifty 500 Index 5 times due to excellent cyclical stock performance.

 

Scheme Suitability

Mirae Asset Nifty Metal ETF is suitable for investors who are looking for:

• Returns corresponding to the Nifty Metal TRI's performance, that are subject to tracking inaccuracy over an extended horizon

• Invest in Nifty Metal TRI covered securities.
  
  

Nifty Metal Index Vs Nifty 50 Index

Nifty Metal Index has produced 41.9%, 19.9%, and 34.7% returns in 1 year, 3 years, and 5 years respectively. Whereas the Nifty 50 Index has given 32.6%, 15.2%, and 19.4% respectively.

Scheme Plan: 

This Scheme doesn’t offer any plan.

 

Mirae Asset Mutual Fund Details

• They manage assets across 38 schemes in India with AUM totaling more than Rs.161740.88 crore.

• One of the AMCs in India with the quickest rate of growth is Mirae Asset. In just 5 years, the number of folios increased from a pitiful 51,304 in 2013 to over 11 lac in 2018.

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Fund Overview

How to Invest in The Scheme After the Closure of The NFO?

If you have missed participating in the NFO and now want to invest in the same Scheme on a continuous basis, then on October 04, 2024, when the Scheme will reopen; you will have the option to participate and invest directly in the Mutual Fund by spending at NAV based price by logging on to your Demat account and search for “Mirae Asset Nifty Metal ETF” or directly with the AMC or simply click the ‘Banner’ below.

 

Asset Allocation (% of Total Assets) of the Scheme's portfolio will be as follows:

 

Peers of Mirae Asset Nifty Metal ETF

Since this scheme is new, hence no comparable data on its past performance against its peers is available.

 

Risk Factors In Such Funds

• There are certain risks associated with the scheme that could negatively impact its net asset value (NAV), return, and/or capacity to achieve its investment goal.

• The Scheme's NAV will respond to changes in the securities market. The Scheme's NAV may fluctuate over short or long periods, exposing the Investor to financial loss owing to social, political, and economic volatility. The Scheme is vulnerable to certain risks that could hurt its return, net asset value, and/or capacity to achieve its investment goal.

• The scheme's performance may be impacted by tracking inaccuracy.

• Despite the Scheme's NSE/BSE listing, there is no guarantee that an active secondary market will form or persist. 

 

Past Performance of Nifty Metal ETFs

 

Mirae Asset Nifty Metal ETF-Growth Fund Managers:

• Ms. Ekta Gala

• Mr. Akshay Udeshi
  
  

Conclusion

This Scheme has a profile that is very high in risk. It has a growth potential because of various Government initiatives and the booming sector currently.  However, returns can not be guaranteed. Your investing horizon and risk tolerance should be taken into account.

Disclaimer: This NFO analysis is provided solely for informative purposes and should not be considered investment advice. Always conduct research and talk with a financial advisor before investing.