Tata Ethical Fund

Type or nature of fund

Tata Ethical Fund is an open ended equity fund.

Investment objective

The investment objective of Tata Ethical Fund scheme is to provide medium to long-term capital gains by investing in Shariah compliant equity and equity related instruments of well-researched value and growth oriented companies.

Fund information

Inception date

24th May, 1996

CRISIL rank

Scheme is ranked 2 under consistent performer equity funds and diversified equity funds as on July 2015.

Plans

Regular and Direct.

Options

Dividend

Growth

Schemes

  • Growth
  • Dividend
  • Direct Growth
  • Direct Dividend

Entry load

N.A.

Exit load

1 percent if redeemed on or before 365 days from the date of allotment.

Minimum investment

Minimum Investment: Rs.5,000

Additional Purchase: Rs.1,000 and in multiples of Re.1 thereafter.

SIP

FrequencyNumber of instalmentsMinimum instalment amount
Monthly12Rs.500
6Rs.1,000
Quarterly6Rs.1,000
4Rs.1,500

Product label – Risk and target investors

Risk : Moderately high risk

Target Investors: This product is suitable for investors who need long term capital appreciation and to those who wish to invest in equity and equity related instruments of companies who are Shariah compliant.

Benchmark

CNX 500 Shariah is the benchmark.

S&P CNX Shariah is a partnership between Standards and Poors and India Index Services & Products. The S&P CNX 500 Shariah is derived from the S&P CNX 500, which is the complete benchmark for the Indian stock market. The S&P CNX Shariah was introduced to capture the movement of Shariah compliant stocks in the Indian stock market for the Islamic investors.

SWP

Yes Systematic Withdrawal Plan is available in monthly and a basis.

Minimum withdrawal amount is Rs.500.

STP

Yes, STP is available for this scheme.

Redemption

Minimum redemption amount per units is Rs.500 per 50 units.

Taxation (on investment and on redemption)

Each investor is advised to consult with his own tax adviser with respect to the specific amount of tax and other implications arising out of his participation in the scheme.

Fund manager

Mr. Pradeep Gokhale manages Tata Ethical Fund. HE has over 21 years of experience. He has a B.Com, CA and a CFA degree. Before joining Tata Asset Management Ltd., Pradeep worked with Lubrizol India, Tata International Ltd. Bombay Dyeing in the Finance and taxation department. He was the Deputy General Manager with Credit Analysis and Research Ltd. He later joined Tata Asset Management Ltd. as a Deputy General Manager for Investment in the year 2004.

Investment philosophy or strategy

Tata Ethical Fund is a diversified equity fund with an investment objective to invest in stocks which are compliant to the Shariah principles of investments. The scheme follows a bottom up approach to stock picking to build portfolio of companies which are Shariah compliant. Tata Ethical Fund prohibits investment from companies that are morally deficient, such as those related to tobacco, alcohol, gambling, lottery, banking & finance services and other prohibited companies.

Portfolio – Sector / Top 10 holdings

Issuer

Sector

Percentage

Lupin Laboratories Ltd.

Pharmaceuticals

4.66

Tata Consultancy Services Ltd.

IT

4.63

Alstom T & D India Ltd.

Engineering

4.35

Shree Cement Ltd.

Cement & construction

3.51

Divi Laboratories Ltd.

Pharmaceuticals

3.47

Britannia Industries Ltd.

Food & Beverages

3.28

Amara Raja Batteries Ltd.

Automotive

3.14

HCL Technologies Ltd.

IT

3.07

Infosys Ltd.

IT

3.05

Colgate- Palmolive India Ltd.

Consumer Non-durables

2.93

Risk measures

Sharpe

As on 31st July, 2015 it is 0.53

Alpha

N.A.

Beta

As on 31st July, 2015 it is 0.84

Standard Deviation

As on 31st July, 2015 it is 9.97.

Performance

AUM as on 31st July 2015

Rs.345.96 crores

NAV (as on 30th June, 2015)

Regular Plan-
  • Growth: Rs.137.33
  • Dividend: Rs.82.57
Direct Plan-
  • Growth: Rs.134.36
  • Dividend: Rs.69.91

Returns and Benchmark comparison

Date

Scheme returns (%)

CNX 500 Shariah (%)

CNX Nifty

(%)

Since Inception (till 30th June, 2015)

17.81

N.A.

11.26

30th June, 2014- 30th June, 2015

24.71

18.59

9.95

30th June, 2013- 30th June, 2014

39.99

36.75

30.26

30h June, 2012- 30th June, 2013

16.81

9.76

10.67

Expenses

Daily Net assets

Tata Ethical Fund expenses

First 100 crores

2.70%

Next 300 crores

2.45%

Next 300 crores

2.20%

Balance assets

1.95%

Expert view of the fund + outlook

Tata Ethical Fund aims to provide medium to long term capital gains by investing in Shariah compliant equity and equity related instruments of the growth oriented companies. This scheme is suitable for creating wealth and for meeting lifestyle needs. Don’t invest in this fund if you want to fund your child’s education, child’s marriage, for retirement or to buy a house. The returns on this scheme are tax free provided that you do not withdraw in a year. If you have invested in this fund, then keep a close watch. But if you are new investor then skip this fund. However, if you are looking for a Shariah compliant scheme, this is the one. It does not invest in companies such as those related to tobacco, alcohol, gambling, lottery, banking & finance services and other prohibited companies.

How to apply – online + distributors

You can buy the Tata Ethical Fund through both the online and offline platforms.

For applying through the online platform, visit the Tata Mutual Fund website and transact. IF you are an existing customer, then you need to use the PIN that was provided to you. You can also transact with just your username detail or without a PIN as well. But, if you are a new customer, then invest after submitting your KYC Form. You can also check the status of your transaction on the main webpage.

In order to apply offline, you will have to physically approach the Tata Asset Management branch and submit your KYC form, after which you will have to fill up the application forms and then submit it at the respective counter. When you approach the bank, you can meet with the executive in charge and find out more about the scheme that you are applying for and then take an informed decision on which scheme that would best suit your needs.

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