Tata Mutual Fund launches NFO; should you invest?

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The Tata Mutual Fund has filed a scheme information document with the market regulator Sebi on 7th July 2021 to launch Tata Business Cycle Fund. This new fund offer by Tata Mutual Fund opens on 16th July, 2021 and closes on 30th July 2021. This scheme is an open-ended equity scheme that will follow a business cycle-based investing theme.

Investment objective

The fund’s investment objective is to achieve a long-term capital appreciation for the investors through investment strategies that emphasise riding business cycles by allocating to sectors and equities at various points of the business cycle. The scheme will be benchmarked with that of Nifty 500 TRI.

There is, however, no promise or guarantee that the scheme’s investment objective will be realised. The plan makes no guarantees or assurances regarding returns as it is subject to market risk.

Fund strategy

At least 80% of the scheme’s net assets will be invested in stock/equity-related securities of companies chosen on the basis of their business cycle. Due to the scheme’s thematic nature, it will be impacted by the risks inherent in the theme/sector. This fund is suitable for investors who have the appetite to take very high risks, as mentioned under the risk-o-meter of the fund product. However, investors should consult their financial advisors before investing in such high-risk products.

What should investors know?

The scheme offers a regular plan, i.e., investors who desire to invest directly with a distributor, and a direct plan, i.e., for the investors who purchase/subscribe to units in a scheme directly from the fund house.

There is no entry load; however, there is an exit load; if the withdrawal or switch-out amount is less than 12% of the investment’s original cost, then there is no entry load. However, if the withdrawal or switch-out is more than 12%, then it will attract an exit load of 1% if it is done before the expiry of 365 days from the date of allotment. The minimum subscription amount starts from Rs 5,000/- and in multiple of Re.1/- thereafter. The maximum total expense ratio is up to 2.25%.