The Indian Electric Vehicle (EV) ecosystem has been witnessing a growing acceptance within the masses. The ecosystem, which was valued at $5 Bn in 2020, is expected to evolve into a $47 Bn market by 2026 — a CAGR of above 44%.
Amid the boom expected, last month, Flipkart’s Sachin Bansal-backed Navi Mutual Fund filed papers for over 10 new schemes with the Securities and Exchange Board of India (SEBI), including an electric vehicle fund.
According to the filings accessed by Inc42, most documents were filed for passively managed funds. A passively managed fund is essentially an auto-pilot operated fund, wherein, a manager purchases and holds securities of a benchmark index.
In addition, passively managed funds are more tax-efficient for investors in comparison to actively managed funds.
Navi’s funds will be an open-ended fund of funds invested in units of overseas ETFs and/or Index Fund based and will be benchmarked against STOXX Global Electric Vehicles & Driving Technology NET Index.
The funds will be channelled towards providing long-term capital appreciation by investing in units of overseas ETFs and/or Index Fund that invest in EV and driving technology, the document read. In addition, it also stated that there is no assurance that the investment objective of the scheme will be realised.
The scheme will be taken care of by DVP of fund management at Navi Asset Management, Girish Raj, who has previously also taken care of Navi 3 in 1 Fund (Equity Portion), Navi Long Term Advantage Fund and Navi Nifty 50 Index Fund.
Besides this, the company has also filed for Navi Nifty India Manufacturing Index Fund and two international funds — Navi S&P 500 FoF and Navi Total China Index FoF.
What sets this scheme apart for Navi is that this is the only fund of funds by the company that is investing in overseas index schemes / ETFs. Since the fund has no benchmark, an illustration mentioned in the filings suggest that if the company is able to maintain its expense ratio at 0.95% or 1.10% the schemes could offer returns upto 13.91% and 13.74%, respectively at a closing asset under management (AUM) of approximately INR 102 Cr.
In February this year, Bansal acquired Essel Mutual Funds — a part of Essel Group — and renamed it Navi Mutual Fund. Subsequently, in June, the company launched its first-ever mutual product Navi Nifty 50 Index Fund — an open-ended equity scheme which will replicate the Nifty50 index.