EV funds are aiming at growth opportunities in ancillary businesses such as semi-conductors and batteries. New and appropriate theme-based mutual funds (MFs) are electrifying. Some of the big global names now have a serious focus on EV manufacturing.
Three mutual funds have recently filed applications for electric vehicle funds with SEBI-
Navi Electric Vehicles and Driving Technology Fund of Fund-
Navi Electric Vehicles and Driving Technology FoF will look to invest in units of overseas exchange-traded funds (ETF) and/or index funds based on STOXX Global Electric Vehicles & Driving Technology NET Index. This index comprises companies that are involved in the production of electric vehicles and assisted driving technologies. The index was launched in 2012.
Mirae Asset Electric Autonomous Vehicle ETF Fund of Fund-
The Mirae Asset Electric & Autonomous Vehicles ETFs Fund of Fund will invest in Global X Autonomous and Electric Vehicle ETF – DRIV (launched in 2018), Global X Lithium and Battery Tech ETF (launched in 2010), and may also deploy sums in Global X China Electric Vehicle and Battery ETF (launched in 2020). The fund house is yet to take a final call on this. The DRIV will also invest in driverless car technology. The US-based Global X ETFs has developed exchange traded funds on several themes, and is a part of the Mirae Asset Financial Group.
Nippon India S&P EV Index Fund
Nippon Life India Asset Management Ltd has applied for an open-ended scheme that will look to replicate or track S&P Kensho Electric Vehicles Index, which is invented to gauge the performance of companies involved in the electric vehicle sector and the ecosystem supporting it. The index could invest in companies that are involved in the manufacturing of electric road vehicles, EV engine systems, energy storage systems, charging infrastructure, and clean energy technology such as hydrogen fuel cells. It is a new index launched in 2018.
In summary, funds aim to represent companies that are focused on delivering electric road vehicles and associated subsystems, powertrains, energy storage systems, clean fuel technology (such as hydrogen fuel cells), and charging infrastructure. An electric vehicle and autonomous driving fund at this point would enable investors to engage in a theme that has a long-drawn runway for growth.
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