New Fund Offer: Tata AMC launches Tata Nifty India Tourism Index Fund – Check details - Money News

Tata Asset Management Company has launched the Tata Nifty India Tourism Index Fund. The launch of the fund comes at a time when the Indian economy is showing remarkable resilience driven by robust investment and consumption.

Written by PF Desk

July 8, 2024 13:01 IST

New Fund Offer: Tata Nifty India Tourism Index Fund launched – Check details

The investment objective of the scheme is to provide returns, before expenses, that commensurate with the performance of Nifty India Tourism Index (TRI), subject to tracking error. (Image: Freepik)

Tata Asset Management Company has launched India’s first tourism index fund, comprising a collection of companies forming part of Nifty 500. The Tata Nifty India Tourism Index Fund will track the Nifty India Tourism Index (TRI, i.e., total returns index). The NFO will open for subscription on the 8^th July 2024 and close on the 19^th July 2024.

This open-ended index fund has been meticulously designed to provide investors with exposure to India’s fastest growing companies from travel, tourism and hospitality businesses. The companies forming the index are leaders in their respective segments and have benefitted from the rising disposable income levels, evolving tastes of the Indian consumer and sustained higher discretionary spends.

At the launch of the index fund, Anand Vardarajan, Chief Business Officer at 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.”

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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 fueling a surge in aspirational and experiential travel bolstered by significant investment in infrastructure, which have expanded air route capacities, making travel more accessible.

Additionally, technology advancements have revolutionized 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.

Index Methodology:

The index methodology for the Tata Nifty India Tourism Index Fund that currently comprises 17 stocks (as on 21st June 2024) adheres to stringent criteria to ensure 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. With a focus on diversification and risk management, the index constituents are weighted basis free-float market capitalization.