{"id":1274,"date":"2019-11-18T12:05:56","date_gmt":"2019-11-18T12:05:56","guid":{"rendered":"https:\/\/blog.certifiedfinancialguardian.com\/?p=1274"},"modified":"2019-11-18T13:09:00","modified_gmt":"2019-11-18T13:09:00","slug":"can-tata-focused-equity-fund-deliver","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/11\/18\/can-tata-focused-equity-fund-deliver\/","title":{"rendered":"Can Tata Focused Equity Fund Deliver?"},"content":{"rendered":"\n

Tata Mutual Fund<\/a> has a history of launching numerous NFOs back-to-back in the past. With the launch of Tata Focused Equity Fund (TFEF)Tata Mutual Fund is adding another fund to its table\u00a0 <\/p>\n\n\n\n

Tata Focused Equity Fund (TFEF), an open-ended diversified equity scheme<\/a> which will follow a focused approach of investing in equity and equity-related instruments. It aims to focus only on a maximum of 30 stocks of companies across market capitalization segments i.e. large-cap<\/a>, mid-cap<\/a>, and small-cap<\/a> and across sectors. <\/p>\n\n\n\n

As per SEBI regulations, a focused fund is not allowed to hold more than 30 stocks and invest a minimum of 65% of its assets in equity and equity-related instruments, which exactly what TFEF is following. But it will also allocate some portion (up to 35% of its total assets) to debt and money market instruments from an asset allocation<\/a> standpoint and to mitigate the risk.<\/p>\n\n\n\n

On the risk-return matrix, TFEF owing to\nits focussed approach while investing in equities would be a very high-risk,\nvery high-return investment proposition, although the fund holds the\nflexibility to invest across market capitalisation segments and is sector\nagonistic. <\/p>\n\n\n\n

[Read<\/strong>: Why Comparing Returns to Risk Is More Meaningful!<\/a>]<\/p>\n\n\n\n

So, TFEF is suitable for investors with a\nstomach for very high risk and an investment time horizon of at least 7-8 years\nwhile seeking capital appreciation. <\/p>\n\n\n\n

Table 1: Details of Tata Focused Equity Fund<\/em><\/strong><\/p>\n\n\n\n

\n Type<\/strong>\n <\/td>An Open-ended equity scheme investing in maximum 30 stocks across market caps (i.e. multi-cap).<\/td>\n Category<\/strong>\n <\/td>Focused Fund<\/td><\/tr>
\n Investment Objective<\/strong>\n <\/td>\nTo generate long term capital appreciation by investing in equity & equity related instruments of maximum 30 stocks across market caps.

\nHowever, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The scheme does not assure or guarantee any returns.\n\n <\/td><\/tr>
\n Min. Investment<\/strong>\n <\/td>\n Rs 5,000 and in multiples of Re 1 thereafter\n <\/td>\n Face Value<\/strong>\n <\/td>Rs 10 per unit<\/td><\/tr>\n\t
\n Plans <\/strong>\n <\/td>\n \u2022 Regular
\n\t\u2022 Direct<\/td>		\n Options<\/strong>\n <\/td>\n
    \n\t\t
  • Growth <\/li>\n\t
  • \tDividend<\/li>\n\t
      \n\t
    • Re-investment Facility*<\/li>\n\t\t
    • Pay-out Facility<\/li>\n\t\t
    • Sweep Facility <\/li>\n\t <\/ul>\n\t<\/ul>\n\t*Default option\n <\/td><\/tr>\n\t
\n Entry Load<\/strong>\n <\/td>Nil<\/td>\n Exit Load<\/strong>\n <\/td>1% of the applicable NAV, if redeemed\/switched out on or before expiry of 365 days from the date of allotment.\n <\/td><\/tr>
\n Fund Manager<\/strong>\n <\/td>Mr Rupesh Patel<\/td>\n Benchmark Index<\/strong>\n <\/td>S&P BSE 200 TRI<\/td><\/tr>
\n Issue Opens<\/strong>\n <\/td>15 November, 2019<\/td>\n Issue Closes:<\/strong>\n <\/td>29 November, 2019\n<\/td><\/tr><\/tbody><\/table><\/div><\/center>\n\n\n\n

\u00a0(Source: Scheme Information Document<\/a>)<\/p>\n\n\n\n

How will the scheme allocate its assets?<\/strong><\/p>\n\n\n\n

Under normal circumstances, the scheme\u2019s asset allocation<\/a> will be as under:<\/p>\n\n\n\n

Table 2: TFEF\u2019s Asset\nAllocation<\/em><\/strong><\/p>\n\n\n\n

\n Instruments<\/strong>\n <\/td>\n Indicative allocations (% of net assets)<\/strong>\n <\/td>\n Risk Profile<\/strong>\n <\/td><\/tr>
\n  <\/strong>\n <\/td>\n Minimum<\/strong>\n <\/td>\n Maximum<\/strong>\n <\/td>\n High\/Medium\/Low<\/strong>\n <\/td><\/tr>
\n ^Equity and equity related\n instruments\n <\/td>\n 65\n <\/td>\n 100\n <\/td>\n Medium\n to High\n <\/td><\/tr>
\n Debt* and money market\n instruments\n <\/td>\n 0\n <\/td>\n 35\n <\/td>\n Low to\n Medium\n <\/td><\/tr>
\n Units issued by REITs &\n InvITs#\n <\/td>\n 0\n <\/td>\n 10\n <\/td>\n Medium\n to High\n <\/td><\/tr><\/tbody><\/table><\/div><\/center>\n\n\n\n

^ Subject to overall limit of 30 stocks across\nmarket capitalization.<\/p>\n\n\n\n

*Includes securitized debt (excluding foreign\nsecuritized debt) up to 70% of the Debt instruments of the Scheme. The Scheme\nshall not invest in foreign securitized debt and credit default swaps.<\/p>\n\n\n\n

The Scheme will comply with all the applicable\ncirculars issued by SEBI as regard to derivatives viz. SEBI Circular no.\nSEBI\/MFD\/CIR No. 03\/ 158 \/03 dated June 10, 2003, no. DNPD\/Cir-29\/2005 dated\nSeptember 14, 2005, no. SEBI\/IMD\/CIR No. 9\/108562\/07 dated November 16, 2007,\nno. Cir\/ IMD\/ DF\/ 11\/ 2010 dated August 18, 2010.The cumulative gross exposure\nto equity, equity related instruments, debt, money market instruments and\nderivatives shall not exceed 100% of the net assets of the scheme. The maximum\nexposure to derivatives will not exceed 50% of the net assets of the scheme. <\/p>\n\n\n\n

The scheme does not seek to invest in foreign\nsecurities. <\/p>\n\n\n\n

The Scheme may participate in repo\/reverse repo in\ncorporate debt securities. <\/p>\n\n\n\n

The Fund may engage in short selling of securities\nin accordance with the framework relating to short selling and securities\nlending and borrowing specified by SEBI.<\/p>\n\n\n\n

Not more than 20% of the net assets of the fund can\nbe deployed in stock lending. The scheme would limit its exposure, with regards\nto securities lending, for a single intermediary, to the extent of 5% of the\ntotal net assets of the scheme at the time of lending. Pending deployment of\nthe funds in securities in terms of investment objective of the Scheme, the AMC\nmay park the funds of the Scheme in short term deposits of the Scheduled\nCommercial Banks, subject to the guidelines issued by SEBI vide it’s circular\ndated April 16, 2007, as may be amended from time to time. <\/p>\n\n\n\n

#A mutual fund may invest in the units of REITs and\nInvITs subject to the following: <\/p>\n\n\n\n