Why Investing in Innovation-Led Sectors May Align with Your Financial Goals

Innovation-led growth is more than just a corporate mantra; it’s a transformative process that defines forward-thinking companies. Think of companies that have changed daily life with new products or advanced healthcare solutions. As a consumer, you benefit from these innovations; as an investor, you could also benefit from their growth.

While you may choose to directly own shares of such companies, thematic mutual funds provide another option. These funds, which align with key industries and trends, allow you to match your portfolio goals with innovation-led companies that have the potential to drive future growth. Typically, thematic funds invest in companies across sectors such as digitization, manufacturing, pharma & healthcare, infrastructure, Information Technologies, and more, aiming to tap into India’s ongoing growth momentum.

India’s innovation journey is a story in progress, one that could span decades. As India sets its sights on developed-nation status by 2047 under the Viksit Bharat program, companies that are driving innovation in products and services are set to play a key role. Sectors like healthcare, renewable energy, technology, and space exploration are areas where India is already making strides. With a rise to 39th place in the Global Innovation Index in 2024 (up from 81st in 2015), India is signaling its commitment to innovation and growth.

Source: Global Innovation Index Database, WIPO, 2024.

As a long-term investor, you may want to consider how thematic funds that focus on innovation-led companies could fit into your investment approach.

What Are Thematic Equity Funds?

Thematic equity funds focus on investments in specific themes or sectors, enabling investors to align with emerging trends. For instance, a thematic fund might focus on sustainable energy, healthcare, or technology—sectors viewed as having potential growth opportunities. This approach allows investors to target areas they believe could drive the future and potentially benefit from their development.

Why Invest in Innovation-Focused Thematic Funds?

Thematic funds may offer several potential advantages:

1. Growth Potential: As companies succeed in launching new products or enhancing services, you may benefit from their growth potential.      
    
2. Capitalizing on Disruption: Innovative companies that transform industries could create new growth opportunities; you may benefit from these transformations as well.      
    
3. Broader Investment Scope: Thematic funds allow access to businesses in emerging sectors that may not be covered by broad based diversified equity funds.      
    
4. Fund Manager Expertise: Fund managers carefully evaluate the potential of companies aligned with each theme, selecting investments that reflect the fund’s purpose.

Innovation led thematic equity funds do focus on future-oriented industries and services that may provide an edge to your portfolio.

About Tata India Innovation Fund

Tata India Innovation Fund aims to provide an investment opportunity focused on innovation-led growth strategies. The Fund seeks to offer investors an opportunity for potential long-term capital appreciation by investing in innovation-focused companies that aim to shape the economy of tomorrow. This thematic fund seeks to invest in companies that may benefit from advancements in various innovative areas of growth, whether in technology, product development, the value chain, or other forward-thinking initiatives.

Designed for investors looking to align their portfolios with India’s next wave of potential growth, this fund focuses on innovation-led companies in sectors such as financial services, technology, automotive, pharmaceuticals & healthcare - areas anticipated to shape India’s economic future. The fund provides access to a growth potential market, enabling investors to capitalize on long-term growth opportunities.

How to Invest in the NFO?

• Minimum investment amount is Rs. 5000, with increments of Rs. 100 for additional investments.
• The NFO is now open to subscription via lumpsum and SIP and will close on 25th November 2024.
• You can invest via our website or by consulting your mutual fund distributor.
• After the NFO period, the fund will be available for standard transactions beginning on 5th December 2024, providing flexibility for ongoing investments.

Scheme Details

Scheme Name

Tata India Innovation Fund

Investment Objective

The investment objective of the scheme is to provide investors with opportunities for long term capital appreciation by investing in equity and equity related instruments of companies that seeks to benefit from adoption of innovative strategies & theme. 

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 equity scheme following innovation theme

Fund Manager

Meeta Shetty 

Kapil Malhotra (Overseas Exposure)

Benchmark

Nifty 500

Min. Investment amount

Rs. 5,000/- and in multiple of Re.1/- thereafter

This product is suitable for investors who are seeking*:

• Long Term Capital Appreciation
• Investment in equity and equity related instruments of companies engaged in and/or expected to benefit from adoption of innovative strategies & theme.

 *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 May 19, 2023, on Product labelling in mutual fund schemes on ongoing basis)

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.