Tata Asset Management Launches Tata Nifty Capital Markets Index Fund: Know More

Tata Asset Management Company announced that it has launched country's first capital market- based index fund.

The Tata Nifty Capital Markets Index Fund launched today will invest in Nifty 500 stocks from financial services verticals such as, asset management companies, exchanges , stockbroking companies, depositories, clearing houses etc.

NFO Details

NFO runs from October 7, 2024 to October 21, 2024. The scheme will re-open on or before October 30, 2024.

The minimum application amount is Rs 5,000 and in multiple of Re.1. The exit applicable will be 0.25 per cent of the applicable NAV, if redeemed on or before 15 days from the date of allotment.

Fund Details & Investment Philosophy

Tata Nifty Capital Markets Index Fund will have 20 stocks that ensures optimal representation of all segments pertaining to capital market businesses, the fund house said. With a focus on diversification and risk management, the index constituents are weighted basis free-float market capitalization.

In terms of performance, the index has delivered a robust 112.64 per cent return over the past year and a 32.95 per cent compounded annual growth rate (CAGR) over the past 5 years.

The composition is as follows: Exchange and Data Platform (34.80 per cent), Asset Management Company (23.99 per cent), Depositories Clearing Houses and Other Intermediaries (21.54 per cent), Stockbroking & Allied (17.14 per cent).

According to the fund house, this open-ended index fund will give exposure to fastest growing companies related to India's capital market, because of the increase in the number of retail investors and sustained capital inflows from domestic and foreign institutional investors.

Anand Vardarajan, Chief Business Officer at Tata Asset Management said, “India's capital markets have been on a remarkable growth trajectory over the past few years. Strong investor confidence and robust economic momentum, drive the markets and mutual funds. We have seen a massive surge of growth in demat accounts, currently at 16 crore."

"In the last decade MF industry AUM grew 6.5 times from nearly Rs 10 Trillion to 65 Trillion. Further, India's MF AUM-to-GDP ratio stands at just 16 per cent — well below the global average of 74 per cent— highlighting significant potential for future growth," he said.

Growing population and rising income level, will act as tailwinds for the capital market ecosystem comprising of broking, depository, exchanges etc, he added.

High smartphone penetration, coupled with the government's significant investments in digital public infrastructure such as UPI and Aadhaar, will also act as tailwinds.