NFO Alert: Tata Mutual Fund launches Tata Nifty India Tourism Index Fund; all you need to know

Tata Mutual Fund announced the launch of the Tata Nifty India Tourism Index Fund, an open-ended equity scheme following a sectoral or thematic theme.

The scheme opened for public subscription on July 08, 2024, and will close on July 19, 2024. The scheme re-opens for continuous sale and repurchase on July 29, 2024.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following the special situations theme.

At the launch of the index fund, Anand Vardarajan, Chief Business Officer, Tata Asset Management said, “High disposable income, infrastructure developments like better highway connectivity, improved railway comfort & 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.”

What is the main objective of investing in this fund?

The investment objective of the scheme is to provide returns, before expenses, that are commensurate with the performance of the Nifty India Tourism Index (TRI), subject to tracking error. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns.

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 has expanded air route capacities, making travel more accessible.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

In line with the investment allocation pattern of the scheme, the scheme will invest in:

• Equity and equity-related instruments and/ or equity derivatives.
• Debt and money market instruments.
• Units of domestic mutual funds

Under normal circumstances, the investment range would be as follows:

Are there similar mutual funds in the market?

To date, no asset management company (AMC) has launched any fund in this category.

How will the scheme benchmark its performance?

The performance of the Scheme is measured against the Nifty India Tourism Index Fund (TRI). As per the investment objective of the scheme, the investment would primarily be in securities which are forming part of the Nifty India Tourism Index. Thus, the composition of the aforesaid benchmark index is such that it is most suited for comparing the performance of the scheme.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under: 0.25% of the applicable NAV, if redeemed on or before 15 days from the date of allotment.

The Exit load (if any) charged to the unit holders by the mutual fund on redemption (including switch-out) of units shall be credited to the scheme net of Goods & Services Tax. Goods & Services Tax on exit load, if any, shall be paid out of the exit load proceeds.

Who will manage this scheme?

Kapil Menon will manage the scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.