Nippon India Nifty Realty Index Fund NFO: Top Real Estate Sector Investment

The Indian real estate market has evolved significantly over the past decade, with transformative changes driving growth and reshaping investment opportunities. From a pre-2016 environment marked by limited regulatory oversight and heavy reliance on NBFC funding, the sector underwent substantial reforms with the introduction of RERA, GST, and IBC between 2016 and 2017.

These changes, coupled with a resilient recovery post-COVID-19, have positioned real estate as a key growth driver in the economy.

The Nippon India Nifty Realty Index Fund NFO offers investors a unique opportunity to tap into this expanding sector by tracking the Nifty Realty Index. As an open-ended index fund, it provides exposure to the leading companies involved in real estate development, construction, and infrastructure, allowing investors to benefit from India’s rapid urbanization and infrastructure boom.

Nippon India Nifty Realty Index Fund NFO aims to deliver returns that align with the Nifty Realty Index, making it an attractive option for those with high-risk tolerance who seek to capitalize on the sector’s growth trajectory while benefiting from a low-cost, diversified investment approach.

Details of Nippon India Nifty Realty Index Fund NFO

This open-ended index fund seeks to replicate the Nifty Realty Index. It invests primarily in companies within the real estate sector, providing exposure to the potential growth of property development, construction, and infrastructure. By focusing on companies in this high-growth sector, the fund allows investors to capitalize on India’s expanding urbanization and real estate development.

Investment Objective of the Fund

The primary goal of the fund is to achieve returns that are in line with the Nifty Realty Index before expenses, with the possibility of tracking errors. While the fund endeavors to match the index’s performance, there is no guarantee of achieving the stated objective, as performance depends on market conditions.

Key Features of Nippon India Nifty Realty Index Fund NFO

This fund provides a unique opportunity to participate in India’s real estate market, with a focus on companies that are essential to the sector’s development. As a low-cost, passively managed index fund, it offers an affordable way to access realty sector growth while reducing individual stock risk through diversified exposure.

Here are the key details of Nippon India Nifty Realty Index Fund:

Portfolio Construction

Nippon India Nifty Realty Index Fund’s asset allocation is as follows:

The portfolio focuses on companies within the Nifty Realty Index, providing exposure to the real estate sector’s potential. The scheme may also invest up to 5% in money market and liquid schemes to manage liquidity without additional fees, as per SEBI guidelines.

Understanding Risks and Returns

With its focus on realty sector companies, Nippon India Nifty Realty Index Fund is aimed at investors looking for long-term growth. The fund has a very high-risk profile, reflecting the inherent volatility and sector-specific risks associated with real estate investments. However, the diversified portfolio across realty companies helps to balance individual stock risks while capturing broader sector growth.

However, the diversified portfolio across realty companies helps to balance individual stock risks while capturing broader sector growth.

Nippon India Nifty Realty Index Fund’s benchmark Nifty Reality has delivered returns of 41.65%,20.22%, and 27.93% in the last 1 year, 3 year, and 5 years respectively.

Since this is the fund’s benchmark, the goal of this fund is to meet or exceed these benchmark returns.

Asset Management Company

Nippon India Mutual Fund (NIMF), originally known as Reliance Mutual Fund, was founded in June 1995 as a joint venture between Reliance Capital and Nippon Life Insurance Company of Japan. In October 2019, Nippon Life acquired Reliance’s stake, leading to the rebranding of the fund to Nippon India Mutual Fund.

A significant milestone for NIMF came in 2017 when it became the first asset management company (AMC) in India to list on the stock exchanges.

The asset management operations for NIMF are handled by Nippon Life India Asset Management Limited (NAM India), which is majority-owned by Nippon Life Insurance Company and Reliance Capital, holding a combined 75.93% stake in the company.

As of June 30, 2024, NIMF oversees assets worth ₹516,267.80 crore across a range of investment products, including Mutual Funds, alternative investments, pension funds, and offshore funds.

Meet the Fund Manager

The fund is managed by Himanshu Mange.

Mr. Himanshu Mange is a Chartered Accountant with over 4 years of experience in the investment management industry. Currently serving as the Fund Manager & Dealer – ETF at NAM India since December 2023, he has managed a diverse range of schemes, including the Nippon India Index Fund – Nifty 50 Plan and Nippon India Index Fund – BSE Sensex Plan.

Prior to this, he held roles as Dealer – ETF and Assistant Manager at Tata AIA Life Insurance, with a focus on investment operations and finance. His extensive expertise in ETF and index fund management reflects his strong understanding of market dynamics and investment strategies.

Who Should Invest in This NFO?

The Nippon India Nifty Realty Index Fund NFO may appeal to:

• Investors aiming for long-term capital growth through exposure to India’s real estate sector.
• Individuals seeking a cost-effective, diversified way to invest in realty.
• Those with a high-risk tolerance who understand the volatility associated with real estate investments.

Nippon India Nifty Realty Index Fund is ideal for investors who wish to benefit from the realty sector’s growth as India’s infrastructure and urbanization progress.

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