Tata Mutual Fund has established the Tata Nifty India Digital Exchange Traded Fund, an open-ended ETF that replicates and tracks the Nifty India Digital Index. The subscription period for the new fund offer, or NFO, began on March 14 and will end on March 25.
Based on market capitalization, the index will choose the top 30 companies that match a pre-defined list of basic industries.
“Tata Nifty India Digital Exchange Traded Fund is a passive portfolio replicating a pre-defined Digital India Index,” Meeta Shetty, Senior Analyst and Fund Manager, Tata Mutual Fund, stated at the launch.
Based on its index development technique, the current characteristics of the Nifty India Digital Index represent digital change agent companies and digital enablers.
We predict more new generation companies to acquire scale, raise financing, and go public over the next 3-5 years as the digital transformation continues.
We are seeing the rise of new hybrid divisions like consumer tech, fintech, ed-tech, and others as this change progresses and new-age firms become a more major component of the economy and equity markets. Over time, the portfolio would include an adequate representation of digital enablers, such as IT services, cloud transformation, and SaaS companies. Along with co., Indian IT services businesses that are ahead of the curve in terms of digital and cloud skills will be an essential element of this industry.
Underpinnings The Tata Nifty India Digital Exchange Traded Fund is a passively managed exchange-traded fund that will use an investment strategy to track the Nifty India Digital Index’s performance. The scheme aims to achieve this by investing in the same proportion as the Index in securities that make up the underlying Index.
The Tata Nifty India Digital Exchange Traded Fund will be a diversified Index-based fund that will invest primarily in equity and equity-related securities with a focus on growth opportunities provided by emerging technology and internet companies such as online shopping, food delivery, travel management, gaming, cloud computing, fintech and edu-tech companies, and so on.
In the same weightage as the Nifty Digital Index, the Tata Nifty India Digital Exchange Traded Fund will invest at least 95% of its total assets in the securities that make up the Underlying Index, which has been identified as companies benefiting from digital transformation and new-age technology providers.
Tata Mutual Fund’s first domestic Fund of Fund product is the Tata Nifty India Digital ETF Fund of Fund, which primarily invests in units of the Tata Nifty India Digital Exchange Traded Fund.
The performance of the Tata Nifty India Digital ETF Fund of Fund will be measured against the Nifty India Digital TRI Index.
Ms. Meeta Shetty will be in charge of the fund.
The NFO subscription period begins on March 25, 2022, and ends on April 8, 2022. On or before April 22, 2022, the plan will reopen for ongoing sale and repurchase.
The minimum subscription amount is Rs 5,000, with subsequent payments in multiples of Rs 1.
The fund has two options: a Regular Plan and a Direct Plan, both of which provide a Growth Option and an Income Distribution Cumulative Capital Withdrawal (IDCW) Option (Re-investment and Pay-out facilities).