Tata Mutual Fund launches Tata Nifty India Digital ETF Fund of Fund

NFO opens on March 25, 2022, and closes on April 8, 2022

Mumbai, March 25, 2022: Tata Mutual Fund launched Tata Nifty India Digital ETF Fund of Fund - An Open-Ended fund of fund scheme investing in Tata Nifty India Digital Exchange Traded Fund.

Key Highlights

• The spend on digital transformation has gathered pace over the last 2 years and is now cutting across businesses, economic activities and various consumption chains. This is not only to optimise cost but also to drive revenues.
• Traditional players are being challenged by new-age companies, which are re-imagining businesses or the modes of delivery of various goods and services.
• These new-age companies are not only benefiting from the availability of risk capital but have also seen higher penetration and wider acceptance by the customers due to the pandemic.
• With NSE 500 as the universe for Nifty India Digital Index, basic industries are defined to cover companies that are focused on digital technology by the Index constructor NSE.
• The index selects the top 30 companies based on market cap, which align to the pre-defined set of basic industries.

Speaking on the launch, Meeta Shetty, senior analyst and fund manager, Tata Mutual Fund, said, “The digital layer is getting added in almost all industries, be it food delivery, Q commerce, health tech or edtech. Digital maturity of consumers, adoption of e-commerce by brands, availability of a wide range of products and convenience have all led to the rise of e-commerce. We have seen that the digital layer can support traditional businesses very well. In some cases, we are also seeing the digital front displacing the traditional business.  On the other hand, super apps capture and help fintechs get access to the buying behaviour, cash flows, savings patterns and credit history of the consumer, which helps to shape the business.

“Tata Nifty India Digital ETF Fund of Fund is an open-ended fund of fund scheme investing in Tata Nifty India Digital Exchange Traded Fund. Tata Nifty India Digital ETF Fund of Fund is a wrapper on the Tata Nifty India Digital Exchange Traded Fund. We believe this new age digital segment will see its own set of winners and losers, but the winners here can be multi-year growth opportunities and being asset-light models. These companies may also generate higher ROEs in the longer run.”

Commenting on the launch, Anand Vardarajan, business head – Banking, Alternate Products and Product Strategy, said, “Digital is a very interesting space, although it is still evolving, especially platform companies. Through Nifty India Digital Index, we aim to capture the growth of these digital companies.

“Tata Nifty India Digital ETF Fund of Fund is a passive portfolio based on Nifty India Digital Index vide a pre-defined methodology that helps in capturing more sub-segments under IT & Digital as compared to the IT index. Stock capping offers stock weights to emerging companies too. In our existing active Digital fund, the idea is to have a larger exposure towards the large and mega IT services companies. Tata Nifty India Digital ETF would relatively have a higher exposure towards new-age digital companies now and over a period, with more equity market company listings. This will increase the pie of alpha generators vis-à-vis steady compounders in the Nifty India Digital Index and thus the ETF Fund of Fund as it is tracking the same index.”