In FY25, equity mutual funds have seen significant inflows, with ₹2.04 lakh crore coming in by September 2024. Notably, thematic funds captured nearly half of this amount, bringing in ₹96,489.33 crore as investors flocked to new fund offers (NFOs) across popular themes.
This momentum has encouraged fund houses to launch multiple funds, adding variety to thematic investment options. Joining this wave, Tata Mutual Fund has launched its NFO Tata India Innovation Fund, designed for those looking to invest in innovation-led companies poised for growth.
The first half of FY25 alone saw 30 new active equity NFOs, with 22 of these being thematic funds focused on sectors like manufacturing, special opportunities, and business cycles.
Let’s explore the TATA India Innovation Fund NFO details and how it aligns with the emerging trend in thematic investments.
Details of Tata India Innovation Fund NFO
The Tata India Innovation Fund is an open-ended equity fund that seeks to invest in companies using innovative strategies across various market caps and sectors, aiming for growth through advancements in products, services, and business models.
Investment Objective of the Fund
The fund’s primary objective is to generate long-term capital growth by investing in equity and equity-related instruments of companies that benefit from adopting innovative approaches. However, the fund does not guarantee any returns, and there is no assurance that its investment objective will be achieved.
Overview of Tata India Innovation Fund
Attributes | Details |
Fund House/Asset Management Company | Tata Mutual Fund |
Risk Profile | Very High |
Fund Managers | Meeta Shetty, Kapil Malhotra |
Category | Equity Fund |
NFO Opens | November 11, 2024 |
NFO Closes | November 25, 2024 |
Benchmark Index | Nifty 500 TRI |
Exit Load | 1% if redeemed on or before 90 days |
Minimum SIP | ₹100 |
Minimum Lumpsum | ₹5,000 |
Portfolio Analysis
The Tata India Innovation Fund will structure its portfolio around companies that are pioneering in innovation, whether through groundbreaking changes or continuous improvements. The fund will invest across a variety of market capitalisations and sectors. Here’s how the schemes will allocate its assets:
Instruments | Indicative Allocations (% of Net Assets) |
Equity and equity-related instruments of companies focused on innovation theme | 80% – 100% |
Other Equity & Equity-related Instruments, including mutual fund units | 0% – 20% |
Debt and Money Market Instruments, including mutual fund units | 0% – 20% |
Units issued by REITs & InvITs | 0% – 10% |
Understanding Risks and Returns
With its focus on innovation-driven companies, the Tata India Innovation Fund NFO is well-suited for investors seeking long-term growth through exposure to emerging and established companies at the forefront of innovation. However, this focus also implies a very high-risk profile, as these investments may experience higher volatility.
Tata India Innovation Fund NFO’s diverse portfolio aims to manage these risks by including a range of companies driving change across sectors and market caps.
The benchmark Nifty 500 TRI has delivered returns of 32.13%, 14.76% and 19.65% in the last 1 year, 3 year, 5 years respectively.
Investors should also expect potential tracking errors relative to the benchmark due to the fund’s focus on companies undergoing rapid evolution.
Asset Management Company
Tata Asset Management, a part of the esteemed Tata Group, manages Tata Mutual Fund. Established in 1994, Tata AMC has developed a diverse range of mutual fund schemes designed to meet the varied risk appetites, financial objectives, and income requirements of investors, covering equity, fixed-income, and hybrid categories.
With a strong emphasis on performance, service, and building trust, Tata Mutual Fund strives to provide innovative investment solutions that promote financial security. As of March 31, 2024, Tata AMC has a robust Assets Under Management (AUM) of INR 1,36,144.12 crores, offering around 58 different schemes across multiple asset classes and plans.
Over the years, Tata Mutual Fund has earned several prestigious awards, including the Best Contra Fund at the CNBC TV18 Mutual Funds Awards 2018 and Best Low Duration Debt Fund for the Tata Treasury Advantage Fund. Known for its reliability and strong market presence, Tata Mutual Fund remains one of the leading asset management companies in India.
Meet the Fund Managers
The Tata India Innovation Fund NFO is managed by two skilled professionals:
Meeta Shetty
Meeta Shetty is a seasoned fund manager with over 18 years of experience in equity research and fund management. She holds a Bachelor’s degree in Economics and is a CFA Charter holder. Meeta currently manages several funds, including the Tata India Pharma & Healthcare Fund and the Tata Focused Equity Fund.
She previously served as the Assistant Fund Manager for the Tata Large & Mid Cap Fund and has worked extensively in equity research, particularly in the pharma, technology, and telecom sectors, with roles at Kotak Securities, HDFC Securities, and AMSEC.
Kapil Malhotra
Kapil Malhotra brings 14 years of experience in investment management and research. He holds an MBA from the Indian Institute of Management, Bangalore, and a B.Sc (Hons) in Business and Administration from Brunel University, London. Kapil currently manages overseas investments and is responsible for funds such as the Tata Business Cycle Fund and the Tata Digital India Fund.
He previously worked as a Senior Equity Research Analyst at Tata Asset Management and has held leadership roles in equity advisory and research, including at Avvanti Advisors and SHK India Private Limited.
Who Should Invest in This NFO?
The Tata India Innovation Fund NFO may appeal to:
- Investors aiming for long-term capital appreciation through exposure to innovation-led companies.
- Individuals seeking diversification across various sectors and market capitalizations.
- Investors with a high-risk tolerance who understand the volatility associated with equity investments in dynamic, innovation-centric markets.
Tata India Innovation Fund is ideal for those looking to benefit from the growing adoption of innovative strategies within the Indian market while seeking capital growth.
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