Nippon India Mutual Fund has launched Nifty IT and Nifty Bank indices.

Investors in these passively managed index funds will get an entire basket of stocks rather than individual companies.

The New Fund Offers will close for subscription on February 16.

The Nippon India IT Index Fund aims to take advantage of the recent resurgence in the technology sector by investing in the top 10 IT companies that are world leaders in technology services.

Of the total global spend on IT services, 40 per cent is outsourced and India accounts for a 58 per cent market share. This revenue comes from a diversified customer base across the US, UK, and Europe.

The Nifty IT Index, which delivered about a 27 per cent return in the last year, has outperformed the Nifty 50 almost 50 per cent of the time in the same period.

The Nippon India Bank Index Fund mirrors the Nifty Bank Index and offers investors a diversified portfolio of investing in the top 12 banks in India. The Nifty Bank Index has provided a return of 13 per cent and 16 per cent in the last one and three years.

The net profit of banks in India grew by 45 per cent in FY23. Besides, credit growth has exceeded 15 per cent in the last year. The substantial increase in digital payments is also fuelling the growth of banks.

Besides sector-specific growth, these funds come with lower costs compared to actively managed funds and provide much-needed diversification, as a single unit of these funds offers exposure to the entire index of companies.