Tata Equity PE Fund: Fund Review

Tata Equity PE Fund is ranked 1st in the category of value funds by Upwardly. The Tata Equity PE Fund gave 19.08% annualized return since its launch in June 2004. Tata Equity PE Fund follows the value-conscious style of investing. The fund has a diversified portfolio. Tata Equity PE Fund is suitable for investors who believe in a value style of investing. Invest in this fund to build wealth for the long term with a minimum investment horizon of 5 years.

Performance

Tata Equity PE Fund is ranked 1st in the category of value funds by Upwardly. The fund performed better than its benchmark in the long-term. In the short-term, the benchmark’s performance overtook the fund’s performance. Also, Tata Equity PE Fund is ideal for long-term and one shouldn’t look at its performance in the short-term as returns in the short-term can be deceptive.

 

 

Tata Equity PE Fund has beaten its category average in the 3, 5, and 10-year by 1-5 percentage points. The fund has performed better than its benchmark in the 3,5, and 10-year return by 3-8 percentage points. It seeks to perform better than its benchmark and peers on a consistent basis. Even with a highly volatile market in 2018, the managed to curb its underperformance. The fund gave 19.08% annualized return since its launch in June 2004.

 

Fund1 Year Return (%)3 Year Return (%)5 Year Return (%)
Tata Equity P/E Fund-3.75%18.78%19.7%
L&T India Value-5.77%14.44%20.92%
ICICI Prudential Value Discovery Fund-0.57%10.29%16.65%
IDFC Sterling Value Fund-8.23%17.02%17.67%
HDFC Capital Builder Value Fund-0.68%15.91%16.09%

 

A SIP investment of Rs 5,000 a month in Tata Equity PE Fund started 5 years ago is worth Rs 4.12 lakhs now. A profit of Rs 1.12 lakhs (Rs 3 lakhs investment). If redeemed now, one will be liable to pay taxes of 10% only on Rs 12,000 as gains up to Rs 1 lakh are tax-free.

 

Fund Information

Tata Equity PE Fund follows the value-conscious style of investing. The scheme aims to invest at least 70% of its assets in companies which, at the time of investment, have a rolling twelve months P/E ratio lower as compared with the rolling twelve month P/E ratio of the BSE Sensex.

The fund also uses several other qualitative and quantitative screens to buy companies. It strives to buy “good stocks at cheap valuations” and not “cheap stocks”. Tata Equity PE Fund invests 70% of its assets in value stocks and has the freedom to invest 30% of the assets in growth stocks.      It invests across market caps.

Also, Tata Equity PE Fund evaluates the stocks based on 5 factors namely, efficiency in the use of capital, governance levels, earnings growth prospects, valuation, and liquidity.

The fund has a diversified portfolio with 40 stocks which are actively managed. The top five holding sectors constitute 78% of the portfolio. These include financials (32.22%), energy (16.38%), automobile (12.14%), technology (9.33%), and construction (7.93%).

Recommendation

Tata Equity PE Fund is suitable for investors who believe in a value style of investing. It is ideal for medium-term to long term goals. Invest in this fund to build wealth for the long term with a minimum investment horizon of 5 years. Tata Equity PE Fund accepts both lump sum and SIP investments. However, investing in this fund through SIP is recommended. Do not look at the fund’s performance in the short-term as short-term returns are deceptive. Invest in this fund with a horizon of at least 5 years.

 

Fund NameTata Equity P/E Fund
Launch DateJune 29th, 2004
AUMRs 5,124 crore
Return (Returns greater than 1 year are annualized)Since Launch: 19.08%
1 Year: -3.75%
3 Year: 18.78%
5 Year: 19.7%
Expense Ratio1.98%
Fund Category RiskHigh
Investment PlanGrowth
Minimum Investment Horizon5+ years
Minimum InvestmentRs 5,000
Minimum Additional InvestmentRs 1,000
Exit Load1% if withdrawn within 18 months. No exit load if withdrawn after 18 months
Fund ManagerSonam Udasi
Amey Sathe
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