Mirae Asset Nifty India New Age Consumption ETF FoF: Worthwhile Proposition to Bet on India’s Consumption Story?

Mirae Asset Mutual Fund has launched Mirae Asset Nifty India New Age Consumption ETF Fund of Fund, it is an open-ended fund of fund scheme investing in units of Mirae Asset Nifty India New Age Consumption ETF

India is currently 5th Largest Economy in the world and is expected to be the 3rd largest economy in the world by Financial Year 2030-2031. Consumption is expected to play a pivotal role in the same. The new-age consumption theme captures the essence of India's economic progress, where discretionary spending and technology-driven services are taking center stage.

As these sectors continue to expand, they present a promising avenue for long-term wealth creation, making them an attractive investment option for those seeking exposure to future-ready businesses.

[Read: What Does Slowdown in India's GDP Growth in Q2FY25 Mean for Your Mutual Fund Investments]

To cater to this growing investor interest, Mirae Asset Mutual Fund has introduced Mirae Asset Nifty India New Age Consumption ETF FOF, which provides a unique opportunity to participate in India's next wave of consumption growth.

What will be the investment strategy for Mirae Asset Nifty India New Age Consumption ETF Fund of Fund?

Mirae Asset Nifty India New Age Consumption ETF Fund of Fund will be managed passively with investment in units of Mirae Asset Nifty India New Age Consumption ETF.

Investments made from the net assets of the Scheme would be in accordance with the investment objective of the Scheme and the provisions of the SEBI (MF) Regulations Subject to the Regulations and the applicable guidelines the Scheme may invest in the schemes of Mutual Funds. The investment strategy shall be in line with the mentioned asset allocation mentioned.

About Mirae Asset Nifty India New Age Consumption ETF

Mirae Asset Nifty India New Age Consumption ETF will invest in stocks in the same proportion as in the Nifty India New Age Consumption Index. The investment strategy of the Scheme will be to invest in a basket of securities forming part of Nifty India New Age Consumption Index in similar weight proportion.

The Nifty India New Age Consumption Index comprises of 75 stocks representing new age consumption theme from large-cap, mid-caps and small-caps segments. The new age consumption theme captures companies that cater to the discretionary and aspirational spending of the Indian

Consumers. It also provide insights into the evolving preferences that define modern consumer behavior in a rapidly changing market by focusing on sectors such as Consumer Services, Automobile and Auto Components, Consumer Durables, Realty etc.

Since the underlying ETF targets companies with growth potential due to rising digital penetration and evolving consumer preferences, the fund of fund indirectly aligns with a growth-oriented approach. The fund's passive nature and thematic focus make it suitable for those with a long-term horizon, looking to benefit from India's evolving consumption trends.

How will the scheme allocate its assets?

Under normal circumstances, Mirae Asset Nifty India New Age Consumption ETF Fund of Fund will hold an allocation of 95% to 100% in Units of Mirae Asset Nifty India New Age Consumption ETF, and 0% to 5% in Money market instruments / debt securities, Instruments and/or units of debt/liquid schemes of domestic Mutual Funds.

Should investments in Mirae Asset Nifty India New Age Consumption ETF Fund of Fund be considered?

Mirae Asset Nifty India New Age Consumption ETF Fund of Fund offers a unique opportunity to participate in sectors and businesses that benefit from rapid digitization, changing consumer preferences, and increased adoption of technology.

It aligns with long-term macroeconomic trends such as rising disposable incomes, urbanization, and the growing penetration of e-commerce and digital services. By investing in units of the Mirae Asset Nifty India New Age Consumption ETF, this fund of fund allows investors to indirectly hold a basket of stocks from the new-age consumption theme, making it an attractive option for thematic, growth-oriented investing.

One of the key advantages of this ETF FOF is its passive investment strategy, which replicates the underlying scheme's performance. Additionally, ETFs are generally low-cost investment options a prudent choice for cost-conscious investors seeking sector-specific exposure.

However, there are risks associated with investment in thematic funds, such as sector concentration and potential underperformance during market downturns or if the specific theme loses favour. The underlying companies in the fund are often in sectors that may see strong growth potential, but they can also experience fluctuations due to changes in market sentiment or sector-specific challenges.

The Mirae Asset Nifty India New Age Consumption ETF FoF can be a compelling choice for investors who believe in the long-term potential of India's consumption growth story. However, the decision should align with the investor's risk tolerance, financial goals, and portfolio strategy.