Fund on tourism theme ‘narrow’, may not suit all investor profiles

Investors with a high-risk appetite could consider an allocation to the new fund offer of Tata Nifty India Tourism Index Fund but in a staggered manner using systematic investment plans .

Most retail investors could stay away from this fund, said wealth advisors. The new fund offer is open and closes on July 19.

"High-risk takers, who can time their investments, can consider a small allocation to this theme," said Anup Bhaiya, founder of Money Honey Financial Services.


This is the first index fund tracking the Nifty India Tourism Index, which consists of 17 stocks, with the top 10 stocks accounting for 90% of the portfolio. Hotels and resorts have a 32% weight on the index, airlines and restaurants have 19% each, and tour and travel-related services around 16%.

Among the top five stocks in the index, InterGlobe Aviation has the highest weightage at 20.31%, followed by Indian Hotels at 19.26%, IRCTC at 13.31%, GMR Airports Infrastructure at 10.57%, and Jubilant FoodWorks at 9.54%.

"This theme is narrow and has a focus on domestic tourism. There are challenges in attracting international tourists or making India a tourist hub," said Vineet Nanda, founder of SIFT Capital. Nanda believes themes like manufacturing or business cycle funds are broader and could be early beneficiaries of economic growth.