5 things to know about auto ETFs

1) Auto ETF is a thematic ETF that aims to provide returns that closely correspond to the total return of the benchmark Nifty 1Auto Index

2) The Nifty Auto Index has stocks of the automobiles segment with no stock holding more than 33% and weights of the top 3 stocks cumulatively not more than 62% at the time of rebalancing.

3) Since it is an ETF it can be bought and sold at real time on the exchange.


4) A sectoral investment is a high risk investment and should have allocation based on the risk profile of the investor.

5) Sectoral investment, especially in cyclical industries is suitable for tactical asset allocation in a portfolio.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)