Tata MF 5 New Fund Offers (NFO) – Own a piece of India

Tata 5 NFO-Own a piece of IndiaTata MF Launches 5 New Fund Offers (NFO) – Own a piece of India


Last week, Tata Mutual funds has launched 5 NFO’s with a theme ‘Own a Piece of India’. Tata Mutual Fund has launched new mutual fund schemes after a long gap of 6 years, hence it is catching attention among several investors. Generally, I would not review New Fund Offers (NFO). Based on request from Mr.Sandeep, on “Suggest a topic” asking to review on Tata MF Own a piece of India, I am analyzing these 5 mutual fund schemes. What are these 5 NFO Mutual Fund Schemes from Tata Mutual Fund is all about? Should you invest in such new MF schemes launched by Tata Mutual Fund?

Features of Tata MF 5 New Fund Offers (NFO) – Own a piece of India


  • Tata has launched 5 NFO’s in various sectors like Banking/Financial Services, Consumer Sector, Technology Sector, Healthcare services and resources/energy sector.
  • Tata is launching these new mutual fund schemes after 6 years, that too 5 NFO’s at a time.
  • Tata believes that new reforms are taking shape and growth estimates in these sectors look promising in long term.
  • Issue opens on 4-Dec-2015.
  • Issue closes on 18-Dec-2015.
  • Minimum subscription is Rs 5,000.
  • Plans are available like any other mutual fund, i.e. direct / regular plans and growth/dividend options.
  • Exit load of 1% if one redeems / switches funds within 90 days from NFO.
  • These are available for further subscription and SIP after 2-3 weeks from NFO closure.

Also Read: Which Mutual Fund to invest in India in 2016?

What are the investment objectives of these schemes?


Main objective of these new NFO’s are to seek capital appreciation by investing between 80% to 100% in equity and equity related instruments in the respective sector indicated in the NFO of the scheme and 0-20% in debt and debt related instruments.

Which schemes are being launched by Tata Mutual Fund now?


Tata MF is launching 5 new mutual fund schemes as indicated below.

Tata 5 NFO-Own a piece of India-Scheme details

However, there are already existing MF schemes which are offering good returns.

Banking and financial services sector


Tata MF is launching Tata Banking and Financial Services Fund in this sector. There are already 2 major MF schemes like Nippon India Banking Fund and ICICI Financial & Services Fund which offered 8% to 12% annualized returns in last 5 years. Banking sector has been lagging in the last few years, hence one cannot expect more than this in such sector.

Technology sector


Tata MF is launching Tata Digital India Fund in this sector. There are already 2 major schemes like ICICI Prutech fund and Franklin Infotech Fund which offered 10% to 16% annualized returns in last 5 years. ICICI Pru Tech Fund is top performer in this segment.

Pharma and Healthcare


Tata mutual fund is launching Tata India Healthcare and Pharma Fund in this sector. There are already 3 major mutual fund schemes like SBI Pharma, Nippon India Pharma and UTI Pharma & Healthcare fund which offered 17% to 26% annualized returns in last 5 years. SBI Pharma fund is the top performer in this category which offered over 26% annualized returns in last 5 years.

Also Read: Tax Saving Mutual Funds to invest in 2016

Should you invest in these Tata 5 NFOs – Own a piece of India


There is nothing wrong in experimenting to invest in new fund offers (NFO). However, let us take a step-back. There is no guarantee these would provide good returns in future. Instead, check for existing funds which has already proven and providing good returns in various market cycles and in various political changes. I feel one should invest in such proven funds. I would prefer to invest in proven best investment plans. I would personally stay away from such NFO’s as of now.

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Suresh
Tata MF Launches 5 New Fund Offers (NFO) – Own a piece of India

6 comments

  • Vinod

    Hello Suresh,

    The link for “proven best investment plans” is going back to the home page. Could you please fix this..?

    Thank you,

    Vinod

  • Dinesh Shirvaikar

    I think for retail investors, it is best to stay away from sector/thematic funds, as they have a very restricted mandate to invest. It would fall upon the investor to track the sector’s prospects and act accordingly.
    And that is exactly what a diversified mutual fund does isn’t it? You pay the fund manager exactly for this purpose – to avoid doing this research and taking a call. So why waste ur own time for this?

    You should dabble in such funds only if u can track a sector’s prospects and be nimble enough to get in and out of such funds. A buy-and-hold strategy would clearly not work for such funds.

    And the themes Tata MF is focusing on are nothing new. It looks to be a case of old wine in new bottle.
    And as u have already said Suresh, there have been funds from various fund houses who have been around for quite some time and have a record to show in these themes.

    So I would strongly say here that retail investors should stay clear of any of these themes and instead look for diversified equity funds, even from the Tata stable such as Tata Pure Equity. They would do the same job as these individual schemes put together and better.

  • bharat shah

    “Instead, check for existing funds which has already proven and providing good returns in various market cycles.” kindly elaborate the various market cycles during last 10-15 years as per you.

  • s ravi chandiran

    Dear Mr. Suresh
    Thank you very much for your immediate response. Understood the contents and noted.

    S. Ravi Chandiran
    9894828077

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