Tata Focused Equity Fund NFO – Should you invest?

Tata focused Equity Fund NFO – Should you invest-minTata Focused Equity Fund NFO Review


Tata focused equity mutual fund scheme would open for subscription on 15th November, 2019. This mutual fund is a multi-cap mutual fund scheme that invests up to 30 stocks across various market capitalizations.  It has come up with caption “take the blur out”. There are currently several multi cap mutual funds in India. In this current scenario would Tata Focused Equity Fund NFO attract investors? What are the features of Tata focused Equity Fund? Should you invest in Tata focused Equity Fund?

Also Read: Where to invest money for short term?

Features of Tata focused Equity Fund NFO


This is an open-ended mutual fund equity scheme.

This scheme would open for subscription on 15th November, 2019

This scheme would close for subscription on 29th November, 2019.

Since this is an open ended scheme, it would again open for subscription after 5-8 business days after the NFO closure date.

This scheme is available in both regular and direct plans.

This plan offers both growth option and dividend option.

This scheme is available for lump sum and SIP investment.

Minimum investment is Rs 1,000 and in multiples of Rs 1 there-off for lump sum investments.

Minimum investment is Rs 150 per month for monthly SIP and for a tenure of 12 months.

The NAV of the NFO is Rs 10 per unit now during initial subscription.

There is no entry load to invest in this mutual fund scheme.

There is an exit load of 1% if the mutual fund units are redeemed within 365 days.

This scheme is classified as MODERATELY HIGH risk scheme.

Scheme total expense ratio (TER) is estimated up to 2.6% (2.25%+ 0.35%) of the total assets on any day.

Tata focused Equity Fund Draft details can be downloaded from here.

What is the investment objective and strategy of Tata focused Equity Fund NFO?


The objective of the MF is to generate long term capital appreciation by investing in equity & equity related instruments of maximum 30 stocks across various market capitalizations.

However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The scheme does not assure or guarantee any returns.

Who is eligible to invest in this new mutual fund scheme?


The following is eligible to invest in this new fund.

1) Resident individuals, either singly or jointly.

2) Minors through Parents/ Legal Guardian.

3) Hindu Undivided Family (HUF) through its Karta.

4) Partnership Firms in the name of any one of the partners.

5) Proprietorship in the name of the sole proprietor.

6) Companies, Body Corporate, Societies, Association of Persons, Body of Individuals, Clubs and Public Sector Undertakings registered in India if authorized and permitted to invest under applicable laws and regulations.

7) Banks

Complete list of eligible participants who can invest can be checked in prospectus of this new fund offer.

Who is the Fund Manager of Tata focused Equity Fund?


The Fund Manager is Mr. Rupesh Patel. Currently Rupesh Patel manages funds like Tata Midcap Growth Fund, Tata Large Cap Fund, Tata India Tax Savings Fund, Tata Infrastructure Fund and Tata Ethical Fund & Tata Offshore India Sharia Scheme.

You may like: Best ELSS Mutual Funds to invest in 2019 to save tax

What is the benchmark for this scheme?


The benchmark for this scheme is S&P BSE 200 TRI.

What is the allocation pattern in this mutual fund scheme?


This fund investment pattern is as follows:

1) It invests 65% to 100% in equity and equity related securities and maximum of 30 stocks across market capitalization. The risk profile in this segment is medium to high.

2) It invests 0% to 35% in debt and money market instruments. The risk profile in this segment is low to medium.

3) It invests 0% to 10% in units of REITs and InvITs. The risk profile in this segment is medium to high.

Can NRI invest in this MF scheme?


Yes, they can invest in this scheme. They can invest on repatriation or non repatriation basis.

Why to invest in the Tata focused Equity Fund?


Here are a few reasons to invest in this fund.

1) This fund is a multi-cap that invests in large cap, midcap and small cap stocks which provides diversification.

2) This mutual fund invests maximum of 30 stocks which can help to focus on a limited number of stocks by the fund manager. Such strategy can help to maximize returns instead of large number where one can loose focus.

Major risk factors you should consider before investing in such funds


One should consider some of these risk factors / negative factors before investing.

1) The fund invests in mid-cap and small-cap stocks which may under perform in the short to medium term. Currently we are already seeing this downfall in these 2 sectors.

2) This fund invests in REITs and InvITs which are high risk.

How is the Performance of Multi Cap Mutual Funds?


Now, let us look at existing Top 5 Multicap mutual funds based on last 5 years returns.

#1 – Motilal Oswal Multicap 35 Fund: This mutual fund gave 13% annualized returns in the last 5 years and 11% annualized returns in the last 3 years and 12% returns in the last 1 year.

#2 – Axis Focused 25 Fund: This mutual fund gave 13% annualized returns in the last 5 years and 18% annualized returns in the last 3 years and 20% returns in the last 1 year.

#3 – SBI Focused Fund: This mutual fund gave 12% annualized returns in the last 5 years and 13% annualized returns in the last 3 years and 18% returns in the last 1 year.

#4 – Parag Parikh Long Term Equity Fund: This mutual fund gave 12% annualized returns in the last 5 years and 13% annualized returns in the last 3 years and 15% returns in the last 1 year.

#5 – SBI Magnum Multicap Fund: This mutual fund gave 11% annualized returns in the last 5 years and 11% annualized returns in the last 3 years and 14% returns in the last 1 year.

If you observe, top funds are performing almost in similar line in the last 3-5 years.

Should you invest in the Tata focused Equity New Fund Offer?


Tata Mutual Funds has come up with this Focused Equity Fund to encash opportunities in Multicap segment. Investing in Multicap mutual fund is a good idea which can help like diversification within your portfolio. However, one should note that new funds do not have past performance, hence difficult to say whether this fund would perform well in future or not. If you want to take risk and test such fund, you can invest now. Alternatively, you can invest in some of the Best Multicap Mutual Funds in 2019 that are already existing and proven the performance in the last 5-10 years.

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Suresh KP

Tata focused Equity Fund NFO Review

5 comments

  • shoumya swaaruppatnaikk

    Too much sips takes & overlapping of stocks in all these schemes ,takes diversification out & so portfolio return will be less .choose one scheme from each category of MFs for better return ,stability,volatality , liquidity in mind.

  • Bino

    Dear sir, Please advise any changes is needed in my SIP portfolio? Axis bluechip#10k, birla frontline equity#10k, Icici pru bluechip# 7K, Axis focused25 #10K, Axis midcap# 5K, l&t midcap#5K, hdfc midcap#3K, Hdfc small cap# 5k, Franklin High growth# 4K, Icici debt ^equity hybrid#9K, Hdfc balanced#2K. Toal 70K sip. Stopped SIP are franklin smaller com, current valur 2lakh from 2-3 years . Birla focused equity 4.5 lakhs from 2 years. Should i hold this or better to invest in this money in another funds? how is my selected funds & portfolio?Any changes is needed for the above ?moderate aggressive. Is there any space for Kotak multicap ? planning to invest sip for 8-10 years. Kindly give reply.

  • Upanand

    Axis focused 25 fund or kotak multicap fund is better to invest in next 10 years.

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