New NFO Alert: SBI Innovative Opportunities Fund
Today we will discuss a super exciting investment opportunity – SBI Innovative Opportunities Fund. Have you heard about India's innovation story? This country is now on its way to becoming a global innovation hub, and this is an amazing chance for you to take advantage of this trend.
India is now fast becoming a global innovation hub and the world's start-up ecosystem and digital infrastructure are growing very rapidly. From electric vehicles, fintech, and artificial intelligence to medical biotechnology, Indian companies are developing cutting-edge technologies and disruptive business models.
India has retained 40th rank among 132 economies in the Global Innovation Index 2023. Coming from 81st rank in 2015 to 40th rank is a big thing. All this is possible because of our knowledge capital, start-up ecosystem, and public-private research organizations. Atal Innovation Mission and NITI Aayog have played a huge role in promoting innovation.
In this year's Budget 2024, innovation has been kept at number 8 out of 9 priorities. These include key initiatives like-
- Anusandhan National Research Foundation: Investment of ₹50,000 crore for R&D (2023-2028).
- Private Sector-Driven Research: ₹1 lakh crore fund to encourage private sector innovation.
- Space Economy Expansion: Venture capital fund of ₹1,000 crore to promote startups and innovation.
- Agriculture Research: To launch 109 high yielding and climate-resilient crop varieties.
- Nuclear Energy Development: Focus on small and modular nuclear reactors, for cleaner energy solutions.
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How Can You Take Advantage of India's Innovation Boom?
One compelling option is to invest in innovation-focused Mutual Funds. Now SBI Mutual Fund, which is India's largest AMC, is launching a new fund "SBI Innovative Opportunities Fund." This scheme is open from 29th July to 12th August.
So, let us first understand what innovation is and where it lies as an investment opportunity.
What is Innovation?
Innovation means creating something new, developing new processes, or introducing fresh business models. From the discovery of fire to the internet, humanity has always been driven by innovation. Even today, every business has to continuously innovate to remain relevant.
Factors that Made India an Innovation Powerhouse
Some key factors that made India an innovation powerhouse are:
Booming Startup Ecosystem: India's startup ecosystem is the third largest in the world, with 115+ unicorns.
Inherent Talent Pool: India produces more than 2.5 million STEM graduates every year, which is the largest talent pool.
Government Support: Initiatives like Startup India and Atal Innovation Mission Credit Guarantee Schemes are providing a supportive environment for Startups.
Strong Digital Infrastructure: Rapid digitization and more than 800 million smartphones, 118 billion UPI transactions, and 7+ 5G-enabled cities provide a strong base for innovation.
Ample Funding: Indian startups have raised approximately $148 billion in funding by Q1 2024.
Investment Strategy by SBI Innovation Opportunities Fund
So, now we understand how this fund executes its investment strategy and research process:
How to Identify Innovative Companies:
They follow an active, research-driven approach. Fund managers focus on:
Product/Service Innovators: Companies that are developing new products or services and investing significantly in R&D.
Process Innovators: Companies that are innovating their business processes and are leading the way in gaining market share.
Innovation Adapters: Established firms that are quick to adopt new technologies and business models.
Now let us see how the SBI Innovation Opportunities Fund identifies innovative companies:
Innovative companies are identified that have adopted automation, AI, and sustainable practices, and have launched proven innovative products/services. The focus is on companies that have significant investments in R&D and strategic partnerships, are capable of fast technology adaptation, make strategic investments in emerging markets, and create sustainable competitive advantages.
Portfolio Construction of SBI Innovation Opportunities Fund
The fund aims to build a concentrated portfolio, consisting of 35-40 stocks, which will be selected through a bottom-up stock-picking process. 80% allocation of the portfolio will be in innovation-themed companies, which focus on cutting-edge technology and disruptive business models.
The remaining 20% ​​allocation will be made in non-innovation sectors and stocks so that the fund can get the benefit of diversification. Apart from this, the fund can also invest up to 35% in foreign equities, which are in companies leading in innovation at the global level.
This approach ensures that the portfolio is diverse, and the investor can benefit from the global trend of innovation.
Who Should Invest in the SBI Innovation Opportunities Fund?
If you are a believer in making money through active investing? This fund is the perfect fit for you. In addition, you can start a SIP at just Rs.10 with a high return expectation. However, do not forget that the bigger the reward the greater the risk.
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Best Funds
| Top funds | 1M Return | 6M Return | 1Y Return | 3Y Return | 5Y Return |
|
|
|---|---|---|---|---|---|---|---|
| SBI Small Cap Fund - Regular Plan - Growth | 1.12% | 21.96% | 39.04% | 25.1% | 30.45% | Invest | |
| SBI Large & MIDCap Fund- Regular Plan -Growth | 1.41% | 18.9% | 36.85% | 21.7% | 24.28% | Invest | |
| SBI Contra Fund - Regular Plan -Growth | 1.47% | 19.24% | 46.56% | 30.07% | 32.73% | Invest | |
| SBI Long Term Equity Fund - Regular Plan- Growth | 1.63% | 21.84% | 57.21% | 28.41% | 27.73% | Invest | |
| SBI Energy Opportunities Fund - Regular (G) | 3.38% | 12.11% | 29.74% | 15.46% | 15.95% | Invest |