The largest fund house in India SBI Mutual Fund on Thursday announced the launch of the Automotive Opportunities Fund, the first-of-its-kind active mutual fund offering which will invest solely in stocks of automobile companies and allied businesses, both domestic and international.

The fund house said the sector has delivered strong returns across time frames and the outlook remains positive, given the rising income and low penetration. SBI MF said that while India was already a top manufacturer of automobiles and its components, the exports are still low, providing ample room for growth in international markets as well.

According to the fund house, the growing demand for premium automobiles and rising electric vehicle adoption also bodes well for the companies in this sector, while bringing new investment options to the fold.

“The Indian Automotive Industry is running in top gear as our country is a force to be reckoned with in terms of production of vehicles and auto exports while our burgeoning domestic market demands safer and premium vehicles. In addition, the manufacturing of auto parts and ancillaries contributes to almost 30 per cent of the manufacturing ecosystem, providing wealth-creation opportunities for investors in the long term. I believe policy reforms and a defined roadmap with the industry provide momentum and an opportunity for investors to benefit from India’s growing automotive ecosystem,” said D P Singh, Deputy MD and Joint CEO, SBI MF.

First Published: May 16 2024 | 8:31 PM IST

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