Indian Railways is the backbone of the country’s infrastructure, driving commerce and connectivity. With significant government spending planned, this sector is set for robust growth. For instance, the Indian government has allocated ₹2.4 lakh crore for railway projects in the 2023-24 Union Budget, marking the highest-ever outlay for the sector. With the financial budget 2025 right around the corner, many eyes are set on how the sector’s going to perform in the forthcoming days.
The Groww Nifty India Railways PSU Index Fund (NFO) is here to offer investors a unique chance to be part of this growth.
Sectoral funds are becoming more popular, and this one, focused on Indian Railways PSUs, is a smart way to diversify and potentially earn returns. This NFO not only aligns with India’s growth plans but also offers a solid investment for those looking to get into government-backed companies that are modernizing the railways.
Want to know how this fund could fit into your investment strategy? Keep reading!
About the Groww Nifty India Railways PSU Index Fund (NFO)
The Groww Nifty India Railways PSU Index Fund (NFO) is a New Fund Offer that allows investors to subscribe to a newly launched mutual fund at its inception.
It is an open-ended index fund designed to passively replicate the performance of the Nifty India Railways PSU Index, offering exposure to companies primarily involved in the Indian Railways ecosystem. Through this fund, investors can gain cost-effective access to a diversified portfolio of Railways Public Sector Undertakings (PSUs) without the need for active stock selection.
Key Details of Groww Nifty India Railways PSU Index Fund (NFO)
Below are some details of Groww Nifty India Railways PSU Index Fund (NFO) that you can glance at for your reference:
| Attributes | Details |
| Asset Management Company | Groww Asset Management Limited |
| Risk Profile | Very High |
| Fund Manager | Abhishek Jain |
| Category | Equity: Thematic-PSU |
| NFO Opens | 16-Jan-2025 |
| NFO Closes | 30-Jan-2025 |
| Scheme Re-opens on or before | 13-Feb-2025 |
| Benchmark Index | Nifty India Railways PSU TRI |
| Type | Open-ended |
| Exit Load | 1% for redemption within 30 days |
| Min. Investment(₹) | Rs. 500 |
| Stamp Duty | As per SEBI, 0.005% stamp duty will be levied on purchase of mutual funds, including lump sum, SIP, STP, and dividend reinvestment. |
Data as of January 03, 2025.
Investment Objective
The goal of this scheme is to grow your money over the long term by investing in the same companies that make up the Nifty India Railways PSU Index, in the same proportions.
The aim is to match the returns of the index (before expenses) as closely as possible, though there might be some small differences. However, it’s important to note that there’s no guarantee that the scheme will achieve its goal.
Why Consider the Groww Nifty India Railways PSU Index Fund NFO?
- Sector on the Move: Indian Railways is the backbone of the country’s infrastructure, driving commerce and connectivity. With significant government spending planned, this sector is set for robust growth.
- Government-Backed Companies: Indian Railways is the backbone of the country’s infrastructure, driving commerce and connectivity. With significant government spending planned, this sector is set for robust growth.
- Spread Out Your Bets: This fund includes a mix of companies from the railway ecosystem, including construction, financial services, and consumer goods.
- Hassle-Free Investing: The fund follows the Nifty India Railways PSU Index, so you can invest passively without worrying about picking individual stocks. Best SIP Platforms like Bullsmart can also be used for your SIP Investment to invest regularly in this index fund.
About the Benchmark Index: Nifty India Railways PSU TRI
The Groww Nifty India Railways PSU Total Returns Index (TRI) tracks the performance of public sector companies connected to Indian Railways.
Key Features
- Composition: Includes 14 stocks from the Nifty 500, split into two groups:
- Core Group: PSUs owned by the Ministry of Railways.
- Non-Core Group: Companies providing goods or services to Indian Railways.
- Weightage:
- Core Group: Maximum 80% total weight.
- Non-Core Group: Maximum 20% total weight.
- Individual Stock: Capped at 20%.
- Rebalancing: The index is reviewed semi-annually to adjust stock composition.
Peer Comparison
Sectoral/Thematic Mutual Funds
Sectoral/Thematic Mutual Funds are types of mutual funds that invest in specific sectors or themes, like technology, healthcare, or renewable energy. Instead of spreading investments across a broad market, they focus on industries or trends that have high growth potential. While they can offer great returns if the sector performs well, they also come with higher risks since they’re more sensitive to the ups and downs of that specific sector.
This table showcases how funds belong to the same category as this fund, i.e., Sectoral/Thematic Funds have been performing lately for you to get an idea what type of activity this fund can showcase in future:
| Fund Name | Category | Expense Ratio (%) | 1 Year Returns (%) | 3 Year Returns (%) | 5 Year Returns (%) | AUM (INR) |
| LIC MF Infrastructure Fund | Equity – Sectoral Fund-Infrastructure | 0.56% | 36.83% | 27.49% | 25.38% | 927 Cr |
| Quant Commodities Fund | Equity – Thematic Fund – Other | 0.95% | 34.26% | – | – | 427 Cr |
| HDFC Defense Fund | Equity – Thematic Fund – Other | 0.77% | 0.77% | – | – | 4,647 Cr |
| Franklin India Opportunities Fund | Equity – Thematic Fund – Other | 0.50% | 29.93% | 25.36% | 26.64% | 6,120 Cr |
| Union Innovation & Opportunities Fund | Equity – Thematic Fund – Other | 0.76% | 29.26% | – | – | 945 Cr |
| Category Avergage | 2.15% | |||||
Observations from the Comparison
Observation
The comparison shows that sectoral funds can deliver strong returns. However, their performance can vary significantly based on market conditions and fund management.
Facts about Listing of the NFO
- Units of the scheme can be bought and sold at NAV-based prices on any business day, providing flexibility and liquidity.
- The units are not listed on any stock exchange at the moment.
- The Trustee has the right to list the units on a stock exchange in the future, at their discretion.
- You can trade units easily for now, with the possibility of future updates.
Things to Keep in Mind
- Focused Exposure: Since it’s all about railways, any policy changes or sector-specific issues could affect your returns.
- Market Ups and Downs: Like any equity investment, this fund can be impacted by market swings.
This fund is all about riding the growth train while staying mindful of the bumps along the way!
How to Invest in the Groww Nifty India Railways PSU Index Fund NFO
Investing in Groww Nifty India Railways PSU Index Fund NFO is straightforward and accessible:
- Mark the Dates: The NFO is open from January 16, 2025, to January 30, 2025.
- Subscribe for the scheme after checking out the details of the fund.
- Start Small: You can begin with a minimum investment of ₹500.
- Top It Up: After your first investment, additional contributions can be made in multiples of ₹1.
This is a simple and exciting way to tap into the growth potential of India’s railway sector—don’t miss out!
To calculate how much you can invest and what your returns may look like, try using the SIP Calculator or Lumpsum Calculator available at Bullsmart. You can also estimate how much you could earn with a SIP Return Calculator. Invest in Mutual Funds to explore more options and see how they align with your financial goals.
About the Fund Manager: Abhishek Jain
- Educational Background: Holds a Bachelor of Arts (BA) and is a qualified Chartered Accountant (CA).
- Professional Experience:
- Previously worked with Edelweiss Tokio Life Insurance.
- Held key roles at Acko General Insurance.
- Gained asset management expertise at Shriram Asset Management Co. Ltd.
- Skillset: Brings a strong mix of financial acumen and practical experience in insurance and asset management.
- Role at Groww Mutual Fund: Leverages his diverse background to strategically manage the Groww Nifty India Railways PSU Index Fund, focusing on delivering value and growth for investors.
Who It’s For
This fund is tailored for those looking to ride the growth wave of India’s railway sector. It’s ideal for:
- Long-term investors aiming for steady capital appreciation.
- Diversification enthusiasts who want to focus on a specific, government-backed sector with significant growth potential.
- Risk-takers, as the fund comes with a very high-risk rating. This means it’s best suited for those who understand the ups and downs of equity markets and are okay with short-term fluctuations for the potential of long-term gains.
If you’re all about big-picture growth and don’t mind some risk, this fund could align with your goals.
Not Ideal For
The Groww Nifty India Railways PSU Index Fund (NFO) may not be ideal for everyone. Here’s who should avoid it:
- Short-term Investors: This fund is for long-term growth, not quick returns.
- Low-Risk Tolerant Investors: With a very high-risk profile, it’s not for those seeking stability.
- Income Seekers: If you’re looking for regular income or dividends, this fund isn’t the best choice.
- Diversification Seekers: It focuses solely on the railways sector, so if you prefer broader market exposure, look elsewhere.
- Skeptical About Railways: If you’re not confident in the sector’s growth potential, this fund might not suit you.
Always consider your goals and risk appetite before investing!
Blending Growth with Tax Efficiency
While the Groww Nifty India Railways PSU Index Fund offers a sector-specific opportunity to capitalize on infrastructure growth, it’s essential to balance your portfolio with tax-efficient investments.
One such option is the Motilal Oswal ELSS Tax Saver Fund, an equity-linked savings scheme that provides dual benefits: wealth creation and tax savings under Section 80C of the Income Tax Act.
By combining a growth-oriented sectoral fund like the Groww Nifty India Railways PSU Index Fund with a diversified ELSS fund, you can align your portfolio with India’s growth story while also meeting tax-saving objectives.
This approach is particularly relevant as the financial year-end approaches, making it an ideal time to explore tax-efficient investment options.
Bottom Line
The Groww Nifty India Railways PSU Index Fund (NFO) presents an exciting opportunity for investors looking to ride the wave of India’s railway infrastructure growth. With the sector set to undergo massive modernization, backed by substantial government investments, this fund gives you a chance to be part of the transformation. By focusing on government-backed Public Sector Undertakings (PSUs) involved in Indian Railways, it offers a mix of stability and growth potential, making it a compelling option for long-term investors.
But let’s be real—the journey isn’t without its bumps. With its very high-risk profile, this fund is suited for investors who are comfortable navigating the ups and downs of the equity markets, all while eyeing the bigger picture. If you’re looking for consistent capital appreciation and are ready for a more targeted exposure to India’s rapidly growing railways sector, this could be a game-changer for your investment strategy.
So, if you’re all about leveraging India’s infrastructure growth while accepting some market volatility, this NFO might just be your ticket to potentially higher returns. Don’t miss out on this opportunity—hop on the growth train and take your investments to new tracks!
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