Nippon India mutual funds launch new innovation fund; check key features before investing

Nippon Life India Asset Management Limited (NAM India), asset manager of Nippon India Mutual Fund (NIMF), announced the launch of Nippon India Innovation Fund, an open-ended equity scheme. The fund will predominantly invest in a diversified portfolio of companies that are driving innovation across themes like fintech, speciality chemicals & pharma, auto & auto ancillaries, internet-based businesses, MNCs, etc.

The fund will invest at least 80 per cent of its assets in innovative companies that have the potential to disrupt their industries and create significant value for investors in the long term. It will have the flexibility to invest across market caps and sectors. The fund's flexibility will allow it to identify better investment opportunities by identifying companies ahead of the curve in new innovation, technologies or business models. The fund may be well-positioned to capture companies that have the potential for significant growth, according to the Nippon India Mutual funds press release.

The NFO opens on August 9, 2023, and closes on August 23, 2023. The minimum investment amount required during NFO is Rs 500 and in multiples of Re 1 thereafter. The performance of the scheme shall be benchmarked against Nifty 500 TRI.

Here are some of the key features of the Nippon India Innovation Fund:

• Invests in innovative companies across sectors
• Minimum 80% of assets in innovative companies
• Flexibility to invest across market caps and sectors
• Focus on High-Quality businesses (Businesses with lower leverage and higher profitability)
• Growth bias
• Focus on companies taking advantage of early trend
• Concentrated portfolio
• Significant focus on innovation
• Rigorous investment process

Sailesh Raj Bhan, CIO of Equity Investments, Nippon India Mutual Fund, said, "Over the next 20 years, India is likely to witness significant investment in Innovation and R&D (Research & Development). The need for creating differentiation through innovation is a key growth driver for the long-term success of any business. Participating in this space is critical as innovation-led transformation and transition may offer growth possibilities across multiple segments. Hence, we are launching Nippon India Innovation Fund to capture some of these potential opportunities. However, we also need to understand that such themes may have higher gestation periods as not all innovation will be successful and attempt to manage the risks through adequate diversification across sectors."

Note: The sectors mentioned are not a recommendation to buy/sell in the said sectors. The scheme may or may not have a future position in the said sectors. According to the press release, this is the current investment strategy based on the prevailing market conditions and is subject to change within the limits of the SID basis the fund manager's view.