SBI Mutual Fund, India’s largest fund house, has launched the SBI Nifty Bank Index Fund. The open-ended scheme, designed to replicate or track the Nifty Bank Index, opens for subscription from January 20 to January 31, 2025.
The Nifty Bank Index represents the performance of India’s leading banking stocks, with a maximum of 12 companies listed on the National Stock Exchange (NSE). The fund aims to deliver returns mirroring the total returns of the index’s securities, subject to tracking error.
Speaking on the launch of new fund, Nand Kishore, MD & CEO of SBI Funds Management Limited, said, “Indian banks have distinguished themselves globally by adopting innovative banking models and digital payment systems which have helped drive the credit cycle advancing the country towards a Viksit Bhara,” adding that, “The SBI Nifty Bank Index Fund provides investors with the opportunity to invest in the largest and most influential banks in India, which continue to lead and transform the nation’s banking sector.”
DP Singh, deputy MD & joint CEO, SBI Funds Management Limited, said, “India’s banking sector has transformed from stress to stability over the past few years, reflecting the nation’s sustained economic growth. Increased infrastructure spending, ongoing reforms to bring more citizens into formal banking, rising digitalization, robust regulations, and growing business credit needs are expected to further boost the banking sector.”
“Large banks, with their extensive resources and nationwide presence, are poised to steer this growth. The SBI Nifty Bank Index Fund offers investors a strong opportunity to be part of the evolving Indian banking landscape in a cost-effective manner,” he noted.
The scheme will primarily invest between 95 per cent and 100 per cent of its assets in stocks that make up the Nifty Bank Index, with up to 5 per cent allocated to government securities (such as G-Secs, SDLs, treasury bills, and other instruments specified by the RBI), including triparty repo and liquid mutual fund units.
The minimum application amount is Rs 5,000, with subsequent investments in multiples of Re. 1. Investors can also opt for Systematic Investment Plans (SIP) on a daily, weekly, monthly, quarterly, semi-annual, or annual basis.
The fund will be managed by Harsh Sethi, an experienced manager handling various passive offerings for the fund house.
SBI Funds Management Limited, a joint venture between the State Bank of India and Amundi, manages assets exceeding Rs 10 lakh crore. The firm follows the CFA Institute Asset Manager Code of Conduct and is a signatory to the United Nations Principles for Responsible Investment.