Tata Mutual Fund recently launched a new fund offer for Nifty India Digital ETF. The NFO opened for subscription on 14 March, and it will close on 25 March. It is suitable for investors who believe in the growth of digital sector, and those looking for economical way to invest in an exchange traded fund.
The fund house also mentions that the investors who are seeking wealth creation opportunity in the long run especially with an investment horizon of five years or more can explore this fund.
To beckon prospective investors, the fund house emphasises that the ‘future is digital’ and says that digital disruptions across sector doubled with the massive technology adoption to drive growth of the Digital India. Also, the impact of digitisation is resulting in transformation across sectors and business functions, and ancillary digital asset-related businesses are likely to drive most of India’s $1.1 trillion in total economic growth in the next 11 years.
|Benchmark||Nifty India Digital Index (TRI)|
Meeta Shetty, senior analyst and fund manager, Tata Mutual Fund says, “Global IT spending to grow at nearly 8 percent CAGR for the next three years versus about 4 percent growth in the pre-pandemic years. Digital adoption has seen a quantum leap since the pandemic and is likely to remain elevated for the next few years."
“The digital layer is getting added to almost all industries and we have seen this, it can support the traditional business very well. In some cases, we are also seeing the digital front displacing the traditional business. We believe this segment will see a set of winners and losers but the winners here can be multi-year growth opportunities. Through Nifty India Digital Index, we aim to capture the growth of the digital companies,” she adds.
About the Index: Tata Nifty India Digital ETF will replicate the constituent of the Nifty India Digital Index. Comprising of 30 stocks, the index reflects the behaviour and performance of the emerging technology and internet companies in the digital space.
The top constituents of index include Bharti Airtel, TCS, IRCTC, Infosys, HCL, Tata Communications, Info Edge (India), Tech Mahindra, Wipro and Honeywell Automation India.
The index selects companies based on market cap belonging to the pre-defined set of basic industries. The index may use artificial intelligence (AI)/ machine learning (ML) driven tools to identify companies within the investing universe.
The weight of index constituents is capped and reviewed on a quarterly basis. The sector weights are capped at 50 percent whereas stock weights are capped at 7.5 percent. The index rebalances quarterly.