NFO alert: Edelweiss Mutual Fund introduces India's first capital markets and insurance ETF

Targeting growth opportunities in financialisation and insurance amid India’s economic surge, Edelweiss Mutual Fund launches Edelweiss BSE Capital Markets & Insurance ETF.

Edelweiss Mutual Fund has introduced a groundbreaking investment opportunity with the launch of the Edelweiss BSE Capital Markets & Insurance ETF. This innovative exchange-traded fund (ETF), the first of its kind in India, seeks to capture the growth potential of the capital markets and insurance sectors, two pillars driving the financialisation of savings in the country.

Edelweiss BSE Capital Markets & Insurance ETF new fund offer (NFO) is open for subscription from December 10 to December 24, 2024. The ETF provides a unique avenue for investors to align with India’s burgeoning financial ecosystem.

Key Features of the Edelweiss BSE Capital Markets & Insurance ETF

1. First in India: The ETF pioneers the combination of capital markets and insurance sectors under one investment umbrella.
2. Mega Trend Focus: It capitalises on India's financialisation trend driven by youth demographics, digital adoption, and increasing prosperity.
3. Sectoral Diversification: A balanced allocation with 47.21 per cent in capital markets and 52.79 per cent in insurance.
4. Index Tracking: Replicates the BSE Capital Markets & Insurance Total Return Index, providing exposure to 30 capped constituents ranked by market capitalisation.
5. Periodic Updates: Semi-annual reconstitution (June and December) and quarterly rebalancing ensure portfolio alignment with market trends.

Fund Details

• Sector Composition
  • Capital Markets (47.21 per cent): Includes players like HDFC AMC, Angel One, and MCX.
  • Insurance (52.79 per cent): Features giants such as SBI Life Insurance and ICICI Lombard.
• Eligibility Criteria: Stocks are selected from the BSE 500 Index and ranked by a six-month average of daily float-adjusted market capitalisation.
• Portfolio Rebalancing: Adjustments are made quarterly for optimal performance and risk management.

Management Comments
Radhika Gupta, MD & CEO of Edelweiss Mutual Fund, expressed confidence in the ETF's innovative approach. “This launch underscores our commitment to identifying mega trends and translating them into meaningful investment opportunities for our clients. The combination of capital markets and insurance reflects a robust growth story in India's path to becoming a developed economy by 2047,” she said.

Gupta also highlighted the ETF’s role in the broader strategy of thematic offerings designed to harness India’s growth drivers like youth, digitalisation, and wealth creation.

Should You Invest?
The Edelweiss BSE Capital Markets & Insurance ETF offers a compelling proposition for long-term investors seeking exposure to India’s financial growth story. Here’s why you might consider it:

1. Growth Potential: Both capital markets and insurance are integral to India's evolving financial landscape, driven by increasing disposable incomes and greater financial literacy.
2. Diversification: Balanced exposure to two high-growth sectors mitigates risks while offering robust returns.
3. Thematic Investment: Ideal for investors looking to ride structural growth trends in financialisation.
4. Passive Strategy: With index replication, the fund ensures low-cost exposure and eliminates the need for active stock selection.

Please note
Investors should consider their risk appetite, as sector-focused ETFs can be volatile. Additionally, the fund's performance is closely tied to the underlying index, which could be impacted by macroeconomic factors.

Disclaimer: The article is for informational purposes only and not investment advice.