Tata Nifty India Tourism Index Fund : Tata Asset Management Company (Tata AMC) has launched the country’s first tourism index fund. Launched under the name ‘Tata Nifty India Tourism Index Fund’, this fund will track the Nifty India Tourism Index. It is an open-ended index fund designed to give investors an opportunity to invest in the fastest growing Indian companies in the travel, tourism and hospitality business. Subscription to this New Fund Offer (NFO) is open from July 8, 2024 and will remain open till July 19, 2024. This is an equity-based scheme and market risk is always associated with investing in equity mutual funds.
Rapid growth expected in travel tourism
Speaking at the launch of the index fund, Anand Varadarajan, Chief Business Officer, Tata Asset Management, said, “Increased disposable income and improved highway connectivity, increasing pace of rail travel, better facilities and development of infrastructure such as new airports have made travel easier, faster and safer than ever before. Air travel facilities, hotels and restaurants are expanding rapidly within the country, which is a very good sign for the tourism sector. From pilgrimage to business and medical travel or vacation, all types of travel are increasing. In this environment, it has become important for investors to understand tourism as a separate segment and benefit by investing in its growth.” According to Varadarajan, travel and tourism expenditure in India is expected to grow to $406 billion by 2030, which was just $140 billion in 2019.
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17 companies are included in the index fund
Tata Nifty India Tourism Index Fund comprises of 17 stocks as of June 21, 2024. The maximum stock level capping limit for a stock in the index is 20%. The Nifty India Tourism Index includes selected companies from the industry which are already present in the Nifty 500. A maximum of 30 stocks of the Nifty 500 index can be included in this index. Keeping diversification and risk management in mind, the weightage of a stock in the index is decided on the basis of its free-float market capitalization.
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Basis for selection of stocks in index funds
Industry |
Weightage of Index (as on 21 June 2024) |
Hotels and Resorts |
32% |
Airlines |
19% |
restaurant |
19% |
Tours, travel related services |
16% |
Airports and Airport Services |
10% |
Luggage |
3% |
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NFOImportant things related to
Name of the scheme | Tata Nifty India Tourism Index Fund |
Duration of NFO | 8July 2024 to July 19, 2024 |
Scheme Re-Opening | On or before 29 July 2024 |
Investment Objective | The scheme aims to provide returns in line with the performance of the Nifty India Tourism Index (TRI). However, there is no guarantee that the scheme will achieve its investment objective. The scheme does not assure or guarantee any returns. |
Scheme Type | Open-ended scheme replicating / tracking Nifty India Tourism Index (TRI) |
Fund Manager | kapil menon |
Benchmarks | Nifty India Tourism Index (TRI) |
Minimum application amount during NFO | Rs. 5,000/- and thereafter in multiples of Rs. 1/- |
Load | Entry Load:Not Applicable (No entry load will be charged from investors in the scheme) Exit Load:0.25% of NAV on exit on or before 15 days from the date of allotment. |
A sector full of future prospects
Tata Nifty India Tourism Index Fund has been launched at a time when the Indian economy is looking much better due to strong investment and consumption. The rapidly growing middle class in the country has increased the demand for comfortable travel with better experiences. Social media platforms have also promoted people’s desire to travel. As a result, investment in travel and tourism related infrastructure has been promoted and the capacity of air travel routes has increased. Due to advancement in technology, the number of online restaurant aggregators has increased and the delivery system has also improved significantly. This has brought a big change in the travel and restaurant sector.
(Disclaimer: The purpose of this article is only to provide information, not to give investment advice. There is market risk associated with investing in mutual funds, so take any investment decision only after fully understanding the scheme and consulting your investment advisor.)