Want to invest in private banks? This ETF may help you earn BIG

To help investors earn good returns amid bearish market sentiment, a new mutual fund scheme has been launched and made available for subscription. The main objective of this scheme is to provide returns, which nearly correspond to the securities total returns,  to investors. Tata Nifty Private Bank Exchange Traded Fund (ETF) was launched last week by Tata Mutual Fund. It is an open-ended Exchange Traded Fund replicating/tracking the Nifty Private Bank Index. It has been open from August 16 and will be available till August 29, 2019. 

ETFs allow the investor to make a low-cost passively managed investment that is a suitable complement to actively managed funds.

In its notification, Tata Mutual Fund said the investment objective of the scheme is to provide returns that closely correspond to the total returns of the securities as represented by the Nifty Private Bank index, subject to tracking error. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved.

Sailesh Jain, fund manager, Tata Nifty Private Bank Exchange Traded Fund, said, "I believe that banks have contributed heavily to the growth of the Indian economy and provided funding for business expansion. Private Banks fare better than PSU Banks on asset quality, interest and non-interest income, profitability and market share. Investing in Tata Nifty Private Bank ETF can give you a portfolio of select private bank stocks and allow investors to tap into the growth of Indian Private Retail and Corporate Banking Sector."

He added, "There is an increasing awareness and demand in the passive space in India. Investors need not restrict themselves in choosing between active and passive investment strategies. They can benefit by adding this offering as a complementary strategy along with their active exposure for meeting their goals in an effective manner."

Nifty Private Bank Index includes 10 Private Banks that fall within the top 800 companies based on both average daily turnover and average daily full market capitalization for the last six months.

What is even more interesting is that the fund is dominated by the five largest private banks by market capitalization that makes up 90% of the index. 

An investor can invest minimum Rs 5,000 and in multiples of Re. 1 thereafter. There are some 15000 Units available for investment. The authorized participants of the fund are Edelweiss Securities Ltd and Jigar Commodities and Derivatives Pvt Ltd.

On allotment, value of each unit will be approximately 1/100th of underlying index. For your information, applications with MICR code will be accepted till August 26, 2019.