Nippon India Innovation Fund: A Thematic Equity Scheme for Long Term Capital Growth

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Nippon India Mutual Fund, one of the leading fund houses in India, has launched a new open-ended equity scheme that will invest in companies that are seeking to benefit from innovation. The scheme is called Nippon India Innovation Fund and it aims to capture the growth potential of businesses that are on the cutting edge of transformation and may drive the future of various sectors.


What is innovation and why is it important?


Innovation is the process of creating new and improved products, services, processes or business models that meet the changing needs and expectations of customers, markets and society. Innovation can provide a competitive advantage to businesses by enhancing their productivity, efficiency, quality, profitability and brand reputation. Innovation can also help businesses to adapt to changing technologies, user habits, regulations and environmental challenges.


Innovation is not limited to any particular sector or industry. It can be found across various domains such as healthcare, education, entertainment, finance, energy, transportation, communication, manufacturing and more. Innovation can also be classified into different types such as product/service innovation, process innovation and business innovation.


What is the investment strategy of Nippon India Innovation Fund?



Nippon India Innovation Fund seeks to provide long term capital appreciation to investors by primarily investing in equity and equity related securities of companies that are adopting innovation themes. The fund will select companies that are potential beneficiaries of disruption, transformation or transition in their respective sectors or markets. The fund will also look for companies that may be future trendsetters or leaders in their fields due to their innovative capabilities.


The fund will follow a bottom-up approach for stock selection and will invest across market capitalizations, sectors and geographies. The fund will have a diversified portfolio of 40-60 stocks with a high conviction approach. The fund will also have the flexibility to invest up to 35% of its net assets in foreign securities of companies that are engaged in innovation themes.


The fund will be benchmarked against Nifty 500 TRI, which is a broad-based index comprising of 500 stocks across various sectors and market capitalizations. The fund will aim to generate alpha over the benchmark by investing in companies that have higher growth potential due to innovation.


Who should invest in Nippon India Innovation Fund?


Nippon India Innovation Fund is suitable for investors who are seeking long term capital growth by investing in equity and equity related securities of companies adopting innovation themes. The fund is also suitable for investors who want to diversify their portfolio by investing in companies that are on the forefront of change and disruption in various sectors and markets.


However, investors should also be aware of the risks involved in investing in thematic equity funds. Such funds may have higher volatility and concentration risk as they invest in a specific theme or sector that may be subject to cyclical or structural changes. Such funds may also have higher exposure to foreign securities which may entail currency risk, geopolitical risk and regulatory risk. Therefore, investors should have a high risk appetite and a long term investment horizon of at least 5 years while investing in this fund.


How to invest in Nippon India Innovation Fund?


The new fund offer (NFO) of Nippon India Innovation Fund is open for subscription from August 9, 2023 to August 23, 2023. The minimum application amount is Rs 500 and the units will be allotted at Rs 10 per unit. The scheme will reopen for continuous sale and repurchase within five business days from the date of allotment.


Investors can invest in this fund through online or offline modes by visiting the website of Nippon India Mutual Fund or contacting their mutual fund distributor. Investors can also opt for systematic investment plans (SIPs) or systematic transfer plans (STPs) to invest in this fund on a regular basis.


Investors should read the scheme information document (SID) and the key information memorandum (KIM) carefully before investing in this fund. Investors should also consult their financial advisors if they have any doubts about whether this product is suitable for them or not.

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