Tata Asset Management Company (Tata AMC) has introduced India’s first index fund based on the newly launched Nifty Capital Markets Index. The Tata Nifty Capital Markets Index Fund will track companies from the Nifty 500 Index that are part of the capital markets ecosystem, including stockbrokers, asset management firms, exchanges, and data platforms.
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Fund Aims to Provide Exposure to Growing Capital Market Companies
The fund seeks to offer investors exposure to the fastest-growing companies in India’s capital market, benefiting from rising retail investor participation, increasing demat accounts, and capital inflows. Anand Vardarajan, Chief Business Officer at Tata AMC, noted that the mutual fund industry’s assets under management (AUM) crossed ₹65 lakh crore in August 2024, and the AUM-to-GDP ratio stands at 16%, showing significant growth potential.
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Index Structure and Stock Selection
The Tata Nifty Capital Markets Index Fund will include up to 20 stocks from the parent Nifty 500 Index, representing businesses such as stockbroking, exchanges, and depositories. The index is weighted based on free-float market capitalization, with a stock cap of 20% to ensure diversification. The index delivered a 112.64% return over the past year.
NFO Details and Features
The New Fund Offer (NFO) is open until October 21, 2024, with a minimum investment of ₹5,000. The fund will reopen for subscriptions by October 30, 2024. The exit load is 0.25% for redemptions within 15 days from allotment.
Fund Manager and Objective
Managed by Kapil Menon, the fund aims to deliver returns that align with the Nifty Capital Markets Index. However, no performance guarantees are provided. It is designed for investors seeking exposure to India’s evolving capital market.
