Tata Asset Management launches India’s first tourism index mutual fund. Here’s what you need to know
This open-ended index fund will give exposure to India’s fastest-growing companies from travel, tourism and hospitality businesses.
- Jul 8, 2024,
- Updated Jul 8, 2024 4:01 PM IST
Tata Asset Management Company on July 8 launched the nation’s first tourism index fund, comprising a collection of companies forming part of the Nifty 500. The Tata Nifty India Tourism Index Fund will track the Nifty India Tourism Index. The NFO will close on July 19, 2024.
The minimum investment amount during the NFO period is Rs 5,000 and can be increased in multiples of Rs 1. There’s no entry load for investing in this NFO. An exit load of 0.25% of the applicable net asset value (NAV) will be applied if you redeem units on or before 15 days of allotment
This open-ended index fund will give exposure to India’s fastest-growing companies from travel, tourism and hospitality businesses. According to Tata AMC, the companies forming the index are leaders in their respective segments. They have benefitted from the rising disposable income levels, evolving tastes of the Indian consumer and sustained higher discretionary spending.
The fund has given 32% weightage to the hotels and resorts sector. It is followed by airlines (19%), restaurants (19%), tour, travel related services (16%), airports and airport services (10%) and luggage (3%).
Anand Vardarajan, Chief Business Officer, Tata Asset Management said, “High disposable income, infrastructure developments like better highway connectivity, improved railway comfort and speed and so many new airports have made travel easy, swift and safe. We are witnessing exponential growth in domestic aviation, hotels, restaurants and travel which augurs very well for the tourism segment.”
“All types of travel, be it pilgrimage, business, medical or leisure are registering a surge. This makes a compelling case for looking at tourism as a segment and how one could invest and aim to benefit from the growth of this sector,” he said.
The launch of the Tata Nifty India Tourism Index Fund comes at a time when the Indian economy is showing remarkable resilience driven by robust investment and consumption. The growing middle class in India is fuelling a surge in aspirational and experiential travel bolstered by significant investment in infrastructure, which have expanded air route capacities, making travel more accessible.
Additionally, technological advancements have revolutionised the travel and restaurant space, with the rise of online restaurant aggregators and a burgeoning delivery economy. Social media platforms further amplify the desire to travel, showcasing diverse destinations and experiences. “As a result, India's travel and tourism expenditure is projected to soar from $140 billion in 2019 to an impressive $406 billion by 2030,” added Vardarajan.
The index methodology for the Tata Nifty India Tourism Index Fund, which comprises 17 stocks, ensures optimal representation of all tourism-related segments, with a maximum stock level capping limit of 20% in the index. This index can house a maximum of 30 stocks from the parent index Nifty 500.
Tata Asset Management Company on July 8 launched the nation’s first tourism index fund, comprising a collection of companies forming part of the Nifty 500. The Tata Nifty India Tourism Index Fund will track the Nifty India Tourism Index. The NFO will close on July 19, 2024.
The minimum investment amount during the NFO period is Rs 5,000 and can be increased in multiples of Rs 1. There’s no entry load for investing in this NFO. An exit load of 0.25% of the applicable net asset value (NAV) will be applied if you redeem units on or before 15 days of allotment
This open-ended index fund will give exposure to India’s fastest-growing companies from travel, tourism and hospitality businesses. According to Tata AMC, the companies forming the index are leaders in their respective segments. They have benefitted from the rising disposable income levels, evolving tastes of the Indian consumer and sustained higher discretionary spending.
The fund has given 32% weightage to the hotels and resorts sector. It is followed by airlines (19%), restaurants (19%), tour, travel related services (16%), airports and airport services (10%) and luggage (3%).
Anand Vardarajan, Chief Business Officer, Tata Asset Management said, “High disposable income, infrastructure developments like better highway connectivity, improved railway comfort and speed and so many new airports have made travel easy, swift and safe. We are witnessing exponential growth in domestic aviation, hotels, restaurants and travel which augurs very well for the tourism segment.”
“All types of travel, be it pilgrimage, business, medical or leisure are registering a surge. This makes a compelling case for looking at tourism as a segment and how one could invest and aim to benefit from the growth of this sector,” he said.
The launch of the Tata Nifty India Tourism Index Fund comes at a time when the Indian economy is showing remarkable resilience driven by robust investment and consumption. The growing middle class in India is fuelling a surge in aspirational and experiential travel bolstered by significant investment in infrastructure, which have expanded air route capacities, making travel more accessible.
Additionally, technological advancements have revolutionised the travel and restaurant space, with the rise of online restaurant aggregators and a burgeoning delivery economy. Social media platforms further amplify the desire to travel, showcasing diverse destinations and experiences. “As a result, India's travel and tourism expenditure is projected to soar from $140 billion in 2019 to an impressive $406 billion by 2030,” added Vardarajan.
The index methodology for the Tata Nifty India Tourism Index Fund, which comprises 17 stocks, ensures optimal representation of all tourism-related segments, with a maximum stock level capping limit of 20% in the index. This index can house a maximum of 30 stocks from the parent index Nifty 500.