Introducing the Tata Consumer Fund
In this constantly developing and expanding Indian economy, the Tata India Consumer Fund provides itself as an investment opportunity to capture and profit from consumers’ growth.
This is a thematic mutual fund, opened on the 28th of December, 2015, to achieve capital appreciation through investment in companies that are engaged in consumption or related activities. Being designed for growth-oriented sectors of the Indian economy, this fund can be regarded as an effective instrument to control money and reach the necessary goals.
In this article, you will see a detailed report on this stock where you will learn about why to include it in your portfolio.
Outlines of the Tata India Consumer Fund
Here are some highlights of this stock:
Investment Objective
Tata India Consumer MF is an open-ended equity fund with the objective of providing long-term capital appreciation through investment solely in preference shares, equities, or equity-related instruments of companies relating to consumption in India; with the minimum asset allocation of seventy-five percent to eighty-five percent of the fund’s assets. Some of these sectors include consumer goods, retail services, service industry and others as a result of growing consumer demands.
Asset Allocation
It spends nearly 93% of the total collected money to grant funds to a number of Turkish universities and other organizations. The proportion of investments of the company is fixated at 92% of assets to equities while the residual of 6. 07% is held in cash and cash equivalents Similar to convertible assets the total percentage of cash and other cash equivalents that they held amounted to a total of 07%. This high equity allocation helps investors use India’s increasing consumption growth story as a key investment angle. First, the fund is well diversified as its top ten positions constitute 56 percent of the total assets. Risk and return showed that it held 59% of its total assets in this sector.
Expense Ratio
The Tata India consumer mutual fund financial expense includes the expense ratio with a value of 2 for the regular plan. June 2006); showing a percentage of 06%, slightly above the average of the category. This cost reflects the charges applied to fund management and may affect the overall Net of Fund Returns.
Minimum Investment
As a bare minimum for the Tata India Consumer Fund, one has to invest ₹5000 upfront and further investments can be made with amounts as little as ₹1000. Another flexible investment plan provided by SIP is the minimum investment amount, which is fixed at ₹ 100, thus making the plan favorable for investors with different financial abilities.
Performance
Since its establishment, it has proven to perform its role as a fund well with good returns. Last year the fund realised a performance of 43. 7% growth, with 21. from 04% to 17% in three years, whereas; 15% over five years. The annualized return since the fund’s inception is around 17 percent. 35%, which is its ability to give returns above its benchmark which is the NIFTY India Consumption Total Return Index.
Why Invest in Tata Consumer Fund?
There are several good reasons to take this stock in the portfolio:
Taking Advantage of Consumption Growth
The ever-growing economy along with increased consumption is an excellent chance to invest in sectors that will show high growth in India through this fund. There are factors that have been noted to support the growth of the consumption sector including an increase in income levels, an increase middle-class population and an increased demand for products and services.
Portfolio Diversification
The Tata India Consumer Fund provides the opportunity to diversify by the sectors, that is the fund invests in a number of consumption-linked companies. This diversification makes it possible to ensure that the levels of investment risk are well managed while at the same time ensuring that there is still exposure towards several of the more promising industries which contributes towards the improved overall reliability and stability of the portfolio.
Expert Management
Skilled individuals who have knowledge of the market and the consumption sector administer the fund. Such skills enable the fund to look for growth prospects and respond effectively to market conditions as far as investment challenges are concerned, with the maximum returns.
Long-Term Wealth Creation
These include the Tata India Consumer Scheme, which has been established by focusing on long-term investment in the Indian consumer market in an effort to generate persistent capital appreciation in the long run. Since India’s consumption sector is likely to expand in the future, when you commit your cash to this fund it means you stand to benefit from the growth of the sector in the future.
Accessible to All Investors
Since the minimum investment required to invest in the Tata India Consumer Mutual Fund is very low and the SIP intervals are also very small this product can attract both first-time investors as well as professional ones. It enables the investor to invest on a small scale while there might be an opportunity to get exposure to the future growth of the Indian consumption theme.
Key Considerations Before Investing in Tata Consumer Fund
Here are some key notes to take about this fund:
- Market Volatility: As is the case with all equity-based funds, the Tata India Consumer mutual fund is not exempt from the risk in the market. Equity prices change and investment value may increase or decrease over the course of time depending on the state of the market, the economy and more. Fund managers must embrace the reality of a possible short-term fluctuation in the price.
- Long-Term Investment Horizon: This fund as stated earlier is planned with long-term goals in consideration. It will not suit the investors, who seeking high liquidity and quick returns on their investment within a short span. Thus, this kind of investment requires the so-called ‘patient capital,’ the intent of which is to generate long-term steady capital appreciation.
- Taxation: It is also important to note that capital gains are applicable to the Tata India Consumer Stock, which generates profits. Capital gains made on shares sold within one year of purchase are taxed at 15% while capital gains made on shares held for more than one year are taxed at 10% if the gains are more than ₹ 1 lakh in a financial year. Such taxes should be taken into consideration when writing down the money to be withdrawn by investors.
Final Note
In short, are you one of those who thinks from a different angle? Yes, then this fund is perfect for you. Just make sure you plan long investment periods like 5-7 years for the least. Moreover, to give your portfolio a disciplined approach, investing via SIP would be the best strategy to plan out a smooth journey.
