SBI Mutual Fund launches value, small-cap ETFs; Groww unveils private bank ETF

India’s passive investing space is witnessing fresh activity, with SBI Mutual Fund and Groww Mutual Fund announcing new exchange-traded funds (ETFs) aimed at capitalising on growing investor interest in index-based investing strategies. The launches come at a time when passive fund assets continue to rise rapidly, driven by increasing awareness, lower costs, and broader participation from retail investors.

SBI Mutual Fund has launched two new ETFs — the SBI Nifty200 Value 30 ETF and the SBI Nifty Smallcap 250 ETF — with their new fund offer (NFO) scheduled to open on May 7 and close on May 18. Both are open-ended ETFs designed to track specific benchmark indices.

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The SBI Nifty Smallcap 250 ETF seeks to replicate the Nifty Smallcap 250 Index, which consists of 250 companies ranked between 251 and 500 within the broader Nifty 500 universe. The index is intended to capture the performance of emerging small-cap companies and currently represents nearly 5.2% of the free-float market capitalisation, according to data from the National Stock Exchange (NSE).

On the other hand, the SBI Nifty200 Value 30 ETF will track the Nifty200 Value 30 Index, which selects 30 companies from the Nifty 200 based on value-investing metrics such as earnings-to-price ratio, book value-to-price ratio, sales-to-price ratio, and dividend yield.

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The fund house said the products are aimed at investors looking for diversified exposure to high-growth and value-oriented market segments through passive investment vehicles. SBI Mutual Fund’s managing director and chief executive officer Nand Kishore highlighted the increasing demand for passive products among investors, while Joint CEO D. P. Singh said the company plans to continue expanding its offerings across value and small-cap categories. Viral Chhadva will manage both ETFs.

The launches also reflect the sharp rise in passive investing across India’s mutual fund industry. Passive fund assets under management (AUM) stood at ₹14.20 lakh crore as of December 2025, marking a 31% year-on-year increase. Passive funds now account for nearly 18% of the industry’s overall AUM, underscoring their growing acceptance among retail and institutional investors alike.

Performance trends have further strengthened investor interest in these categories. The Nifty Smallcap 250 Index has posted strong long-term gains, while the Nifty200 Value 30 Index delivered approximately 24.18% returns over the one-year period ended April 30, 2026.

However, analysts caution that both small-cap and value investing strategies come with elevated risk. Small-cap stocks are generally more volatile and sensitive to shifts in market sentiment, liquidity conditions, and earnings expectations. Although the Nifty Smallcap 250 Index has rebounded nearly 20% from its March 2026 lows, experts believe selective exposure remains important given valuation concerns in parts of the segment.

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Value investing, too, often requires patience and a longer investment horizon. Financial advisors typically recommend limiting allocation to value-focused strategies within a diversified portfolio, as undervalued stocks may take time to realise their potential.

Groww Nifty Private Bank ETF

In a separate development, Groww Mutual Fund has introduced the Groww Nifty Private Bank ETF, with its NFO open between May 6 and May 20, 2026. The ETF aims to track the Nifty Private Bank Index – TRI and provide investors with exposure to India’s private banking sector through a rules-based passive strategy.

The Nifty Private Bank Index consists of 10 major private sector banks selected on the basis of liquidity and market capitalisation. Key constituents include Axis Bank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Federal Bank, and IndusInd Bank.

According to Groww Mutual Fund, private banks have steadily strengthened their position in India’s financial system over the past decade. Their share in total banking deposits has increased from around 21% to nearly 38%, supported by strong balance sheet growth, improving asset quality, and healthy profitability metrics.

The index is currently trading at a price-to-earnings ratio of 17.54, below both its five-year and ten-year historical averages, indicating relatively moderate valuations in the segment. The ETF requires a minimum investment of ₹500 and carries no exit load.

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The latest launches highlight intensifying competition among mutual fund houses in India’s ETF market, as asset managers continue to expand offerings across factor-based, sectoral, and thematic passive investment categories.