The rise of ETFs has got another leg up, with Tata AMC filing papers for the Tata Nifty Exchange Traded Fund. The fund will track the performance of the Nifty 50 index. The scheme will be launched as an open-ended ETF which means you will be able to buy/sell units after the ETF is launched (after the NFO period). You can do this on a stock exchange but you will need a demat and trading account.
Tata Nifty Exchange Traded Fund will be benchmarked against the Nifty 50 TRI (Total Returns Index). As of 31st July 2018, the Nifty 50 Index has shown returns of 12.70% and 14.61% for the 1 year and 5 year periods. It has a P/E of 28.22. Sectors such as financial services (37%), energy (15%), Information Technology (13%), consumer goods (11%) and automobile (8%) are the major sectors featured in this index.
As this new ETF from Tata tracks the Nifty 50, it will feature large cap oriented, sector agnostic equity investments that account for 95% to 100% of its assets. Key individual equity and equity-derivative investments of this ETF are expected to include HDFC Bank, Reliance Industries Ltd., HDFC, Infosys and ITC as they have the largest individual weights on the Nifty 50 index. The remainder of this scheme’s assets of up to 5% may be invested in various money market funds including units of the Tata Liquid Fund.
Tata Nifty Exchange Traded Fund will be managed by Danesh Mistry who currently manages other top funds of Tata Mutual Fund AMC including Tata Equity Savings Fund, Tata Digital India Fund, Tata India Pharma & Healthcare Fund and Tata Resources & Energy Fund. Among these, the Tata Digital Fund is a relatively new launch in the sectoral/thematic segment and has posted 1 year returns of over 62%. However the Nifty ETF will simply track the Nifty 50, giving the fund manager a limited role in the ETF’s performance.
Other Funds by Tata Asset Management
Scheme Name | 3Y Returns (%) | AUM (Rs. Cr.) | Category |
Tata Digital India Fund | 21.92 | 111.56 | Sectoral/Thematic Fund |
Tata Banking and Financial Services Fund | 18.01 | 253.91 | Sectoral/Thematic Fund |
Tata India Consumer Fund | 17.4 | 973.5 | Sectoral/Thematic Fund |
Tata Retirement Savings Fund Progressive Plan | 14.17 | 451.51 | Multi Cap Fund |
Tata Index Sensex Direct | 14.14 | 5.04 | Large Cap Fund |
Tata India Tax Savings Fund | 13.2 | 1398.27 | ELSS |
Tata Index Nifty Direct | 12.23 | 11.08 | Large Cap Fund |
Tata Retirement Savings Fund Moderate Plan | 12.09 | 659.89 | Aggressive Hybrid Fund |
Tata Large & Mid Cap Fund | 11.46 | 1297.88 | Large & Mid Cap Fund |
Tata Midcap Growth Direct Plan | 11.31 | 692.48 | Mid Cap Fund |
Tata Large Cap Direct Plan | 10.75 | 799.42 | Large Cap Fund |
Tata Ethical Direct Plan | 10.32 | 517.86 | Sectoral/Thematic Fund |
Tata Equity PE Fund | 8.78 | 3519.81 | Value Fund |
Tata Retirement Savings Fund Conservative Plan | 8.76 | 133.5 | Conservative Hybrid Fund |
Tata Gilt Securities Fund | 8.01 | 117.76 | Gilt Fund |
Tata Income Fund | 7.49 | 112.41 | Medium to Long Duration Fund |
Tata Dynamic Bond Fund | 7.09 | 701.43 | Dynamic Bond Fund |
Tata Hybrid Equity Fund | 6.91 | 5552.16 | Aggressive Hybrid Fund |
Tata Liquid Fund | 6.9 | 15156.38 | Liquid Fund |
Tata Equity Savings Fund | 6.24 | 214.93 | Equity Hybrid Saving Fund |
{Data as on Feb 20, 2020; Source: Value Research}