ICICI Prudential Nifty Metal ETF: A Smart Investment Choice for Capitalizing on Metal Industry Growth

NFO Opens on August 1, 2024, and Closes on August 12, 2024

The offering provides investors with an opportunity to gain exposure to the metal sector which is diverse and dynamic

The ETF will invest in a range of companies involved in both ferrous and non-ferrous metals, reflecting the behavior and performance of the companies forming a part of the metal sector

The NFO period is from August 1, 2024, to August 12, 2024

MUMBAI: ICICI Prudential Mutual Fund has announced the ICICI Prudential Nifty Metal ETF launch. The offering aims to provide returns before expenses that correspond to the returns provided by the Nifty Metal Index, subject to tracking errors. The Nifty Metal Index includes companies from the metal sector, including ferrous and non-ferrous metals.

The Nifty Metal Index is designed to reflect the behavior and performance of the Metals sector (including mining). The Nifty Metal Index comprises a maximum of 15 stocks that are listed on the National Stock Exchange. These companies are selected from the Nifty 500 based on their market value, ensuring a broad representation of the sector. The index composition ensures that no single company has more than 33% weight, and the top three companies cumulatively do not exceed 62% of the index.

Speaking on the launch of the product, Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC, said, “ICICI Prudential Nifty Metal ETF is designed to provide investors with access to one of the critical sectors that form the backbone of industrial growth. The metal sector, encompassing crucial industries like steel, aluminum, and copper, is integral to infrastructure and economic development. With increasing demand and consumption, especially in a rapidly growing economy like India, this sector presents a compelling long-term investment opportunity. Our Metal ETF aims to allow investors to benefit from the uptick in metals due to expected higher global inflation amidst lower interest rates.“

Why invest in ICICI Prudential Nifty Metal ETF?

The Nifty Metal TRI has outperformed the Nifty 500 TRI five times in the last decade, demonstrating its potential for delivering good returns. Investing in the ICICI Prudential Nifty Metal ETF provides:

Exposure to a key sector essential for economic growth.

Access to well-established companies experiencing renewed global interest.

A relatively low valuation compared to broader market indices, coupled with increasing demand and consumption.

A convenient entry with a minimum investment of just one unit.

Performance of the Index: Calendar Year Returns (%)

Nifty Metal TRI has Outperformed the Nifty 500 TRI five times in the last 10 years.

Data as of June 28, 2024. Data Source: Nifty Indices https://www.niftyindices.com/indices/equity/sectoral-indices/nifty-metal, MFI Explorer. MFI Explorer is a tool provided by ICRA Online Ltd. MFI Explorer is a tool provided by ICRA Online Ltd. For their standard disclaimer please visit http://www.icraonline.com/ legal/standard-disclaimer.html. The performance of the index does not signify the returns of the scheme. Past performance may or may not be sustainable in the future.

Data as of July 23, 2024. Data Source: Nifty Indices https://www.niftyindices.com/indices/equity/sectoral-indices/nifty-metal. MFI Explorer. MFI Explorer is a tool provided by ICRA Online Ltd. MFI Explorer is a tool provided by ICRA Online Ltd. For their standard disclaimer please visit http://www.icraonline.com/legal/standard-disclaimer.html. CAGR stands for The compound annual growth rate (CAGR) is the rate of return (RoR) that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment’s life span. Returns rebased to Rs. 100 as of 12th July 2013. The performance of the index does not signify the returns of the scheme. Past performance may or may not be sustained in the future.

Index Portfolio Snapshot:

Top 10 constituents by weightageWeightage (%)Tata Steel Ltd.20.97Hindalco Industries Ltd.14.82JSW Steel Ltd.12.99Adani Enterprises Ltd.12.18Vedanta Ltd.9.38Jindal Steel & Power Ltd.5.61NMDC Ltd.4.11APL Apollo Tubes Ltd.4.04Jindal Stainless Ltd.3.86Steel Authority of India Ltd.3.14

Source: Nifty Metal Factsheet. As of June 28, 2024. https://www.niftyindices.com/Factsheet/ind_nifty_metal.pdf. The sector(s)/stock(s) mentioned in this document do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future positions in the sector(s)/stock(s).

The Nifty Metal Index is updated twice a year to reflect the sector’s performance accurately and has outperformed broader market indices since inception, as shown in the above graph, demonstrating its potential for delivering good returns.

The minimum application amount during the NFO is Rs. 1000 (plus in multiple of Re. 1).

This ETF’s benchmark is the Nifty Metal TRI, and Mr. Nishit Patel and Ms. Priya Sridhar are the fund managers of the ETF.

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