Tata Mutual Fund introduces 'Tata Regular Savings Equity Fund'. This
scheme has been structured by changing some of the fundamental
attributes of 'Tata Monthly Income Fund'. The investment objective of
the scheme is to provide long term capital appreciation and income
distribution to the investors by predominantly investing in equity and
equity related instruments, equity arbitrage opportunities and
investments in debt and money market instruments. The fund also aims to
generate tax efficient returns in the long term.
Units of the scheme will be available for ongoing subscription at NAV based price with effect from 1st August 2015 and being open ended in nature, will have perpetual duration.
Tata Regular Savings Equity Fund will have 0% to 35% allocation to net long equity, managed strategically as per 'Tata Red Line Strategy'. The fund will maintain 65%-90% exposure to equity and equity-related instruments including derivatives. Debt and money market instruments (including margin for derivatives) will have an indicative allocation of 10%-35% under normal circumstances.
The new fund will offer two plans—regular plan and direct plan. Both plans would offer growth & dividend options. The Dividend option offers Dividend Payout, Dividend Reinvestment and Dividend Sweep facilities; available with monthly & quarterly frequencies.
Speaking on this occasion, R. Ganesh, CEO & MD, Tata Asset Management Ltd. said that, "Tata Regular Savings Equity Fund is part of our continued endeavor to offer our customers a portfolio of innovative products and investment options. We are confident that the fund will fulfil the need for a tax efficient investment option for less than 3 year investment horizon with lower volatility than regular equity-based funds".
Commenting on the restructured fund, Ritesh Jain, CIO, Tata Asset Management Ltd. said, "This new category of fund offering equity exposure coupled with safety is a superior alternative to MIPs. Investors who don't want to lock in their money for three years in debt funds can consider equity savings funds. We are optimistic that this category will grow in future".
Tata Regular Savings Equity Fund has an exclusive feature - 'Tata Red Line Strategy' (referred as 'Valuation Overlay' in the SID) for strategically managing the equity allocation. Equities are volatile in nature but a longer holding period helps in neutralizing volatility in equity. However, equity investing experience can further be improved by strategic equity rebalancing. Most investors understand the general volatile nature of equity. However there is a need for managing allocation to equity to safeguard against major market downturns like the Tech Bubble in 2000, Global Financial Crisis in 2008 and the European Crisis in 2010.
Tata Red Line Strategy uses trailing PE of CNX Nifty to strategically manage allocation to equity by cutting equity allocation during hyped valuation periods and reinvesting at long term average valuations or lower. The strategy is termed the 'Red Line Strategy' as it draws a Red Line in terms of valuations beyond which it does not pay to remain invested in the markets.
The scheme will be benchmarked against a customized benchmark with 35% CNX Nifty + 30% Crisil Liquid Fund Index + 35% Crisil Short Term Bond Fund Index. The minimum application amount is Rs. 5000. The scheme will charge an exit load of 1% if investments redeemed within a year. No exit load will be charged thereafter. Atul Bhole (Equity Portfolio) and Akhil Mittal (Debt Portfolio and Arbitrage Strategies) are the fund managers for the scheme.
Units of the scheme will be available for ongoing subscription at NAV based price with effect from 1st August 2015 and being open ended in nature, will have perpetual duration.
Tata Regular Savings Equity Fund will have 0% to 35% allocation to net long equity, managed strategically as per 'Tata Red Line Strategy'. The fund will maintain 65%-90% exposure to equity and equity-related instruments including derivatives. Debt and money market instruments (including margin for derivatives) will have an indicative allocation of 10%-35% under normal circumstances.
The new fund will offer two plans—regular plan and direct plan. Both plans would offer growth & dividend options. The Dividend option offers Dividend Payout, Dividend Reinvestment and Dividend Sweep facilities; available with monthly & quarterly frequencies.
Speaking on this occasion, R. Ganesh, CEO & MD, Tata Asset Management Ltd. said that, "Tata Regular Savings Equity Fund is part of our continued endeavor to offer our customers a portfolio of innovative products and investment options. We are confident that the fund will fulfil the need for a tax efficient investment option for less than 3 year investment horizon with lower volatility than regular equity-based funds".
Commenting on the restructured fund, Ritesh Jain, CIO, Tata Asset Management Ltd. said, "This new category of fund offering equity exposure coupled with safety is a superior alternative to MIPs. Investors who don't want to lock in their money for three years in debt funds can consider equity savings funds. We are optimistic that this category will grow in future".
Tata Regular Savings Equity Fund has an exclusive feature - 'Tata Red Line Strategy' (referred as 'Valuation Overlay' in the SID) for strategically managing the equity allocation. Equities are volatile in nature but a longer holding period helps in neutralizing volatility in equity. However, equity investing experience can further be improved by strategic equity rebalancing. Most investors understand the general volatile nature of equity. However there is a need for managing allocation to equity to safeguard against major market downturns like the Tech Bubble in 2000, Global Financial Crisis in 2008 and the European Crisis in 2010.
Tata Red Line Strategy uses trailing PE of CNX Nifty to strategically manage allocation to equity by cutting equity allocation during hyped valuation periods and reinvesting at long term average valuations or lower. The strategy is termed the 'Red Line Strategy' as it draws a Red Line in terms of valuations beyond which it does not pay to remain invested in the markets.
The scheme will be benchmarked against a customized benchmark with 35% CNX Nifty + 30% Crisil Liquid Fund Index + 35% Crisil Short Term Bond Fund Index. The minimum application amount is Rs. 5000. The scheme will charge an exit load of 1% if investments redeemed within a year. No exit load will be charged thereafter. Atul Bhole (Equity Portfolio) and Akhil Mittal (Debt Portfolio and Arbitrage Strategies) are the fund managers for the scheme.
