The SBI Nifty IT ETF is an open-ended exchange-traded fund (ETF) managed by SBI Mutual Fund, designed to mirror the performance of the NIFTY IT Total Return Index, which tracks the top IT companies listed on the National Stock Exchange of India.
Key Details:
- Launch Date: October 20, 2020
- Net Asset Value (NAV): ₹468.93 as of December 27, 2024
- Expense Ratio: 0.22%
- Assets Under Management (AUM): ₹86.83 crore as of September 30, 2024
- Fund Manager: Harsh Sethi
- Benchmark: NIFTY IT Total Return Index
- Risk Level: Very High
Performance:
- 1-Year Return: 24.37%
- 3-Year Annualized Return: 6.55%
- Return Since Launch: 20.38%
Top Holdings
- Infosys Ltd: 26.19%
- Tata Consultancy Services Ltd: 24.10%
- HCL Technologies Ltd: 10.48%
- Tech Mahindra Ltd: 9.88%
- Wipro Ltd: 7.55%
Tax Implications:
- Short-term Capital Gains (STCG): 15% if units are redeemed within 1 year.
- Long-term Capital Gains (LTCG): 10% on gains exceeding ₹1 lakh if units are redeemed after 1 year.
- Dividend Distribution Tax: Dividend income is added to the investor’s income and taxed as per applicable slabs.
SBI Nifty IT ETF share price
As of December 31, 2024, the SBI Nifty IT ETF (Ticker: SBIETFIT) is trading at approximately ₹469 per unit.
Key Details:
- Previous Close: ₹469.46
- Day’s Trading Range: ₹468.00 – ₹471.42
- 52-Week Range: ₹444.27 – ₹461.60
- Volume: 1,081 units traded
Recent Performance:
The ETF has shown a 1-year return of 24.37% and a 3-year annualized return of 6.55%.
Portfolio Composition:
The fund primarily invests in major IT companies, with top holdings including Infosys Ltd (26.19%), Tata Consultancy Services Ltd (23.44%), HCL Technologies Ltd (10.48%), and Tech Mahindra Ltd (10.42%).
Market Context:
On December 31, 2024, Indian markets experienced a decline, with the Nifty 50 index dropping by 0.51% to 23,522.9 points, influenced by a 2.2% fall in the IT sector.
Strengths of SBI Nifty IT ETF:
(1) Sector-Specific Exposure:
Focuses on the NIFTY IT index, offering targeted exposure to India’s top-performing IT companies like Infosys, TCS, HCL, and Wipro.
(2) High Growth Potential:
The Indian IT sector is a major global player, benefiting from digital transformation, outsourcing trends, and technological advancements.
(3) Cost-Effective:
With a low expense ratio (~0.22%), the ETF provides a cost-efficient way to invest in the IT sector.
(4) Diversification Within the Sector:
Provides exposure to a basket of IT stocks, reducing company-specific risks while retaining sector-specific growth potential.
(5) Liquidity and Ease of Access:
Being an ETF, it can be traded on stock exchanges during market hours, offering flexibility and liquidity.
(6) Aligned with a Resilient Industry:
The IT sector has shown resilience during economic downturns, as companies rely on technology for operational efficiency.
Risks of SBI Nifty IT ETF:
(1) Sector Concentration Risk:
As a sector-specific ETF, it lacks diversification across industries, making it susceptible to sector-specific downturns (e.g., reduced IT spending or geopolitical challenges in key markets like the US).
(2) High Volatility:
The performance of the ETF is tied to the IT sector, which can be highly sensitive to global economic trends, currency fluctuations, and policy changes.
(3) Tracking Error:
Although minimal, there may be slight deviations between the ETF’s performance and the underlying NIFTY IT index due to management and transaction costs.
(4) Dependence on Global Markets:
Indian IT companies derive a significant portion of their revenue from global markets, particularly the US and Europe. Economic or regulatory changes in these regions can impact profitability.
(5) Interest Rate and Currency Risk:
Fluctuations in interest rates and currency exchange rates (e.g., INR-USD) can affect the earnings of IT companies, influencing ETF returns.
(6) Technological Disruption:
Rapid changes in technology could challenge established companies in the index, affecting their market position and valuation.
(7) Market Sentiment:
Being an equity-based investment, the ETF is subject to market volatility and investor sentiment, which could lead to short-term price fluctuations.
Who Should Invest?
- Investors with a high-risk appetite and long-term investment horizon (5-7 years or more).
- Those looking to capitalize on the growth of India’s IT sector and its global competitiveness.
- Individuals comfortable with sector-specific investments and willing to ride out short-term volatility for potential long-term gains.
SBI Nifty IT ETF growth
Here’s a growth summary for the SBI Nifty IT ETF with a table that outlines its performance over various time periods:
SBI Nifty IT ETF Growth Performance
| Time Period | Growth (%) | Annualized Growth (%) |
| Since Launch (Oct 2020) | ~20.38% | ~20.38% |
| 1-Year (2024) | ~24.37% | N/A |
| 3-Year CAGR (2021–2024) | ~6.55% | ~6.55% |
| YTD (2024) | ~10.50% | N/A |
Key Insights
Since Launch:
- The ETF has provided an annualized return of approximately 20.38% since its inception in October 2020, reflecting strong growth in the IT sector.
1-Year Growth (2024):
- The ETF has grown by around 24.37% in the past year, highlighting strong performance, especially as global IT spending and digital transformation trends continue to rise.
3-Year CAGR (2021–2024):
- The 3-year annualized return stands at 6.55%, indicating steady growth despite some short-term market fluctuations.
YTD (2024):
- Year-to-date growth of approximately 10.50% as of the end of December, driven by a recovery in IT stocks and continued demand for IT services globally.
Growth Drivers
Robust IT Sector Growth:
- The IT sector in India remains one of the top-performing sectors due to global demand for outsourcing, software development, and digital services.
Top Holdings’ Performance:
- Major companies like Infosys, TCS, and HCL Technologies are benefiting from long-term trends in cloud computing, AI, and automation.
Conclusion:
The SBI Nifty IT ETF has demonstrated strong growth, with substantial returns in both the short term (1-year) and long term (since launch). It is an attractive option for those seeking targeted exposure to the Indian IT sector’s robust growth, with the potential for capital appreciation over time.
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