Tata Asset Management launches first index fund based on BSE Select Business Groups Index to invest in India’s future
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November, 2024: Tata Asset Management today announced the launch of the Tata BSE Business Group Index Fund, a new investment opportunity designed to provide investors with exposure to India's leading conglomerates. The fund opened for subscription on November 25, 2024, and closes on December 9, 2024.
The Tata BSE Select Business Group Index Fund tracks the BSE Select Business Groups index, comprising companies from seven of India’s largest business groups. These conglomerates span 19 diverse industries, reflecting central themes of India’s economic growth. The fund will include 30 companies from key sectors driving India's future growth, with the financial services sector excluded to focus on other industries.
The seven business groups included in the fund are Tata Group, Reliance Industries, Adani Group, Aditya Birla Group, L&T, Jindal Group, and Mahindra Group. The weightage for each group is capped at 23% based on their free-float market capitalization.
Anand Vardarajan, Chief Business Officer at Tata Asset Management, commented, "We are excited to launch the Tata BSE Select Business Group Index Fund, which provides investors with a unique opportunity to participate in the growth story of India's leading conglomerates. These businesses have demonstrated their ability to adapt and thrive in a dynamic market environment, making them one of the attractive investments for long-term investors."
He added that " investors could benefit from the power 7 were in the top conglomerates which power the growth story will be a part of the index and one could benefit from a portfolio which is very diversified across sectors while still being with the top 7 business groups."
India’s growing economy, with a GDP surpassing USD 3.7 trillion, has positioned the nation as the fifth-largest economy globally. With the government's ambition to become the third-largest economy by 2028, these conglomerates are expected to play a critical role in achieving that goal.
“The business groups’ diversified operations, technological advancements, and strong market presence position them as key contributors to the nation's economic aspirations. By investing in this fund, investors can gain exposure to these dynamic companies and participate in India's economic success,” added Vardarajan.
Through this fund, investors can get exposure to new-age/up-coming growth-oriented sectors like electric vehicles and battery technology, green energy and smart cities, AI and quantum computing and defense and aerospace, among others.
The Tata BSE Select Business Group Index Fund is open-ended and available for both subscription and redemption. The weightage for each group is capped at 23% based on their free-float market capitalization. Currently, the Tata Group has a weightage of 22.7%, Reliance Industries at 22.3%, and L&T Group at 15%.
Index Methodology
The index methodology of the Tata BSE Business Group Index Fund comprises a maximum of 30 stocks, representing companies within the largest 7 business groups in India. The largest company is based on the 6-month average free-float market capitalization from every group. The next 23 companies are ranked based on 6-month average free-float market capitalization and included in the index.
