India’s capital markets are rapidly growing, presenting potential avenues for wealth creation. These markets are not just for trading stocks—they are a network of financial enablers that drive the economy forward. Whether it's stock exchanges, asset management companies, financial advisory, or depositories, capital markets play a crucial role in facilitating financial transactions.
With the shift from physical to financial assets and the increasing participation of Indian households in equities, investing in capital market enablers offers a viable avenue for long-term growth. Tata Nifty Capital Markets Index Fund, India’s first Capital Markets Index Fund, provides an opportunity to tap into this potential and gain exposure to the companies powering the financial system.
Why Invest in Capital Markets Enablers?
India’s capital market players are in a transformative phase, driven by economic growth, rising investor confidence, and increased financialization of savings. Here's why capital markets could be considered an attractive investment option:
- Shift from Physical to Financial Assets: Indian households are shifting from traditional investments like currency, deposits, gold, and real estate to financial products such as equities and mutual funds. This change is supported by rising household savings in India, which are expected to grow from $650 billion to $1 trillion by the end of the decade, fueling the growth of financial assets. (Source: MOSPI)
- Underpenetrated Equity Markets: While the shift is underway, only 5% of Indian household financial assets are currently invested in equities, compared to about 30% in other emerging markets. (Source) This shows there’s significant room for growth as more retail investors begin to participate.
- Increasing IPOs and Promoter Selling: India has witnessed a surge in IPOs, providing new investment opportunities. In 2024, promoter selling reached $10 billion, the highest in five years, creating more liquidity and opportunities for diversification. (Source)
- Rising Market Capitalization: With rising investor confidence and economic growth, India’s stock market capitalization has surged. In June 2024, it stood at ₹397 lakh crore, reflecting the growing strength of the capital markets. (Source).
- Typically, Asset-Light Business Models: The businesses in capital markets generally have fixed costs which provides operating leverage. Thus, such businesses are indexed to top line growth.
Capital Markets: The Enablers of Growth
The capital markets are more than just platforms for buying and selling securities. They are essential enablers of growth for the economy, ensuring the smooth flow of capital to businesses and investors. Investing in Tata Nifty Capital Markets Index Fund could provide you with an opportunity to access these important enablers, including:
- Stock Exchanges: The backbone of the financial system, enabling the trading of stocks and bonds.
- Asset Management Companies (AMCs): Asset Managers who manage funds on behalf of investors, helping them grow their wealth.
- Depositories and Clearing Houses: These entities ensure the safe custody of financial securities and smooth settlement of transactions.
- Stockbroking Firms: Facilitators of trading activities, connecting retail and institutional investors with the capital markets.
- Financial Product Distributors: Professionals who advise clients and recommend financial products.
These companies play a pivotal role in ensuring that businesses can raise capital and that investors have access to growth opportunities. By investing in them, you’re not just investing in financial instruments—you’re participating in the long-term growth story of India’s economy. These businesses are typically asset-light with near to zero debt on their balance sheets, running a good operating leverage as topline rises and costs rise much less. Thus, these businesses are expected to see improvements in margins and profitability, making them potentially high RoE and ROCE.
Why Choose Tata Nifty Capital Markets Index Fund?
Tata Nifty Capital Markets Index Fund is among the first of its kind in India. It provides investors with an opportunity to gain exposure to companies that play an important role in the capital markets. Here are some reasons why you might consider it:
- India’s First Capital Markets Index Fund: Aim to gain exposure to a diversified portfolio of companies that enable the functioning of India’s capital markets.
- Exposure to Potential Growth Enablers: The fund gives you access to stock exchanges, asset management firms, depositories, and more, all of which are integral to the financial system.
- Participation in Expanding Markets: Indian Equity Markets are hugely underpenetrated. With the rise of IPOs, growing market capitalization, increasing active investors, demat accounts, Mutual Fund Industry AUMs and folio counts, India’s capital markets are expanding rapidly, offering ample opportunities for investors.
Who Should Invest?
This fund is suitable for:
- Long-term Investors: Those who want to invest in companies with growth potential within the capital markets.
- Focused Exposure Seekers: Investors looking to gain targeted exposure to key companies within the capital markets, including stock exchanges, AMCs, financial advisories, depositories & more.
- Retail Investors: Individuals seeking to benefit from India’s underpenetrated equity markets and the shift from physical to financial assets.
- Wealth Builders: Those aiming to build wealth by participating in the growth of India’s capital markets over the long term.
Key Benefits of the Tata Nifty Capital Markets Index Fund
- Cost-Effective: As a passively managed fund, the expense ratio is lower, making it a more affordable option for long-term investors.
- Hassle-Free Investing: This fund offers a simplified approach to investing in capital markets without the complexities of individual stock selection.
- Unbiased and Disciplined Strategy: By following the Nifty Capital Markets Index, the fund ensures a rule-based and disciplined investment approach, eliminating emotional biases.
India’s capital markets offer a potential opportunity for investors, driven by increasing household savings, underpenetrated equity markets, and expanding market opportunities. Tata Nifty Capital Markets Index Fund—the first of its kind—provides a diversified way to invest in the enablers of India’s financial growth. Whether you are a new investor or seasoned in the markets, this fund offers a cost-effective approach to participating in India’s financial evolution.
Don’t miss out on this opportunity—invest in Tata Nifty Capital Markets Index Fund today and aim to be a part of India’s financial growth story. You can also consider exploring our other index funds tailored to your financial goals, risk tolerance, and investment strategy.
Scheme Details
- Scheme Name: Tata Nifty Capital Markets Index Fund
- Investment Objective: The investment objective of the scheme is to provide returns, before expenses, that commensurate with the performance of Nifty Capital Markets Index (TRI), subject to tracking error. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns.
- Type of Scheme: An open-ended scheme replicating / tracking Nifty Capital Markets Index (TRI).
- New Fund Offer Price: The units being offered will have a face value of Rs. 10/- per unit.
- Fund Manager: Kapil Menon
- Benchmark: Nifty Capital Markets Index (TRI)
- Min. Investment Amount: Rs 5,000/- and in multiple of Re.1/- thereafter.
- Load Structure:
- Entry Load: Not Applicable (Pursuant to provision no. 10.4.1.a of SEBI Master Circular on Mutual Fund dated June 27, 2024, no entry load will be charged by the Scheme to the investor)
- Exit Load: 0.25% of the applicable NAV, if redeemed on or before 15 days from the date of allotment.
This product is suitable for investors who are seeking*:
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| *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. | ||
(The above product labelling assigned during NFO is based on internal assessment of the scheme characteristics and the same may vary post NFO when the actual investments are made. The same shall be updated as per provision no. 17.4.1.i of SEBI Master Circular on Mutual Fund dated June 27, 2024, on Product labelling in mutual fund schemes on ongoing basis.)
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
