Bengaluru, October 8, 2024: Tata Asset Management Company, a pioneer in the mutual fund industry, has launched the country’s first index fund based on the newly launched Nifty Capital Markets Index. The Tata Nifty Capital Markets Index Fund will track the performance of stocks from the Nifty 500 Index that are relevant to the capital market theme. The index includes companies from financial services verticals such as, asset management companies, exchanges and data platforms, stockbroking and allied services, depositories, clearing houses, financial products distributors, ratings, and other capital market-related services.
This open-ended index fund has been meticulously designed to provide investors with exposure to fastest growing companies from India’s robust capital market. The companies forming the index have benefitted from evolving investment needs, increase in the number of retail investors and sustained capital inflows from domestic and foreign institutional investors.
At the launch of the index fund, Anand Vardarajan, Chief Business Officer at Tata Asset Management said, “India’s capital markets have been on a remarkable growth trajectory over the past few years. Bolstered by strong investor confidence and robust economic momentum, more individuals are turning to mutual funds and direct equities to participate in potential wealth creation journey. We have seen a massive surge of growth in demat accounts which now stands close to 16 crs. The mutual fund industry’s AUM surpassed the INR 65-lakh crore mark in August 2024. In the last decade MF industry AUM has moved 6.5 times from nearly INR 10 Tn to 65 Tn. That having said, India’s MF AUM-to-GDP ratio stands at just 16%—well below the global average of 74%—highlighting significant potential for future growth.* Growing population and rising income level is also leading to a surge in HNI investors which are being catered by broking and wealth management outfits to meet their investment needs. This has led to growth of entire capital market ecosystem comprising of broking, depository, exchanges, RTAs and so on.
“Financialisation of savings have been big trigger and increasingly investors are looking to move to stocks and mutual funds. In addition to rising household incomes driving greater allocations towards financial assets, India’s capital market ecosystem is benefiting from powerful tailwinds. High smartphone penetration, coupled with the government’s significant investments in digital public infrastructure such as UPI and Aadhaar, have enabled rapid investor onboarding and heightened engagement. This digital transformation is paving the way for broader participation and deeper integration into the capital markets”
Index Methodology:
Tata Nifty Capital Markets Index Fund that can comprise of maximum top 20 stocks adheres to stringent criteria to ensure optimal representation of all segments pertaining to capital market businesses, with a maximum stock level capping limit of 20% in the index. This index can house a maximum of 20 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.
In terms of performance, the index has delivered a robust 112.64% return over the past year and a 32.95% compounded annual growth rate (CAGR) over the past 5 years.*
