Tata Ethical Fund Overview and Investment Features

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The Tata Ethical Fund is an open-ended equity fund that aims to provide long-term capital growth to its investors. It invests in a diversified portfolio of stocks, focusing on companies that adhere to high moral and ethical standards.

This fund is suitable for investors who want to invest in a socially responsible manner, aligning their investments with their values. The fund's investment approach is guided by the principles of ESG (Environmental, Social, and Governance).

The Tata Ethical Fund has a minimum investment requirement of ₹5,000, and the fund house charges an expense ratio of 1.5% per annum. The fund's portfolio is actively managed, with a team of experienced fund managers who regularly review and rebalance the portfolio to ensure it remains in line with the fund's investment objectives.

Investment Details

The Tata Ethical Fund - Direct Plan - Growth is an open-ended equity scheme that follows the Shariah principles, aiming to generate long-term capital growth through an investment in a portfolio of equity and equity-related instruments of growth-oriented companies.

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The minimum application amount for this scheme is Rs. 500, with a minimum additional investment of Rs. 1,000 and in multiples of Re.1 thereafter.

To invest in this scheme, you can choose from various options, including lumpsum, Systematic Investment Plan (SIP), and Systematic Withdrawal Plan (SWP). The minimum SIP amount is Rs. 500, and the minimum lumpsum investment is Rs. 5,000.

The fund has a high-risk profile and is suitable for investors who want capital gains throughout the investment period.

Asset Allocation

The Tata Ethical Fund - Direct Plan - Growth scheme has an asset allocation of 80% to 100% in equity and equity-related instruments of Shariah-compliant companies.

This means that the majority of the fund's investments are in growth-oriented companies that follow Shariah principles.

The remaining 0% to 20% is invested in other instruments that comply with Shariah principles, such as cash.

This asset allocation is in line with the fund's objective of generating long-term capital growth.

Take a look at this: Vanguard Equity Income Funds

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Here's a breakdown of the fund's asset allocation:

This asset allocation strategy is designed to provide investors with a high-risk, high-reward opportunity to achieve medium and long-term capital appreciation.

Investment Amount

To invest in the Tata Ethical Fund, you'll need to meet the minimum application amount requirements. The minimum application amount is not specified, but you can invest a minimum of Rs.1,000 and in multiples of Re.1 thereafter for additional investments.

You can also make repurchases and switches, which have a minimum amount of Rs.500 per 50 units. This means you'll need to purchase at least 50 units to meet the minimum repurchase or switch requirement.

The minimum installment for a Systematic Investment Plan (SIP) is Rs.500, and the same applies to a Systematic Withdrawal Plan (SWP). This ensures that you're investing a consistent amount regularly, which can help you achieve your long-term financial goals.

Here's a summary of the minimum investment amounts for the Tata Ethical Fund:

Note that the entry load is not applicable, which means you won't have to pay any fees when you invest. However, there is an exit load of 1% of the applicable Net Asset Value (NAV) if you redeem your units within 365 days of allotment.

Manager

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Mr. Pradeep Gokhale is the fund manager for Tata Ethical Fund - Direct Plan - Growth.

He holds a Chartered Financial Analyst and a Chartered Accountant certification, as well as a Bachelor's degree in Commerce.

Gokhale started his career as a Finance Executive in organizations like Lubrizol India, Bombay Dyeing, and Tata International.

He worked with Credit Analysis and Research Ltd. (CARE) as the Head of Financial Sector Ratings for 9 years.

Gokhale joined Tata Asset Management in September 2004, where he was the Head of Research before becoming a fund manager.

Fees and Charges

The Tata Ethical Fund has a range of fees and charges that you should be aware of before investing. The exit load is 0.50% if you redeem your investment within 90 days.

One notable fee is the exit load, which is a charge applied when you withdraw your money from the fund. This is a common practice in the mutual fund industry.

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If you redeem your investment within 90 days, you'll be charged an exit load of 0.50%. This is a straightforward rule that's clearly outlined in the fund's documentation.

It's essential to consider these fees when deciding whether to invest in the Tata Ethical Fund. The exit load can eat into your returns, so it's crucial to factor this into your investment strategy.

Returns and Performance

The Tata Ethical Fund has delivered impressive returns over the years. With a 5-year return of 19.4%, it's clear that this fund has been a strong performer in its category.

In fact, the fund's 5-year return is significantly higher than the category average of 20.2%. This suggests that the fund's investment strategy has been effective in generating returns for investors.

Here are the fund's returns over different time periods:

As you can see, the fund's returns have been consistent over the years, with a 10-year return of 15.8% in the "All" category. This suggests that the fund's investment strategy has been effective in generating returns for investors over the long term.

The fund's SIP returns have also been impressive, with a 5-year return of 69.41% on a ₹6,00,000 investment. This is a significant return, and it's clear that the fund has been a strong performer in its category.

Consider reading: Vc Fund Returns

Frequently Asked Questions

Is Tata Ethical Fund a good investment?

Tata Ethical Fund is a high-risk equity mutual fund with volatile returns, but it may generate better returns with long-term investment

Is Tata Ethical Fund really halal?

Yes, Tata Ethical Fund is a Shariah-compliant investment option, adhering to Islamic principles of investing. It selects stocks that meet the fundamental principles of Shariah, ensuring a halal investment experience.

Which companies come under Tata Ethical Fund?

The Tata Ethical Fund holds stakes in Tata Consultancy Services Ltd. (5.03%), Hindustan Unilever Ltd. (3.85%), and Cummins India Ltd. (3.69%), among others. These companies represent a small portion of the fund's overall portfolio, with the majority held by other entities.

Rodolfo West

Senior Writer

Rodolfo West is a seasoned writer with a passion for crafting informative and engaging content. With a keen eye for detail and a deep understanding of the financial world, Rodolfo has established himself as a trusted voice in the realm of personal finance. His writing portfolio spans a range of topics, including gold investment and investment options, where he provides readers with valuable insights and expert advice.

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