With 21% increase in the financial budget of the infrastructure sector to Rs 5.97 Lakh Cr in the year 2018-19, it has become one of the most growing sectors of India. The Foreign Direct Investments (NYSE:FDI) are also 100% allowed in the sector, so investors are investing more in the sector for wealth creation in the long run. Thus, Tata Mutual Fund has brought Tata Infrastructure Fund for investors, who are looking for investment in the sector via mutual funds. More details of the fund have been discussed as under:
About Tata Infrastructure Fund:
A thematic fund that aims at the long-term capital appreciation of the investors. This fund has been predominantly investing in the equity and equity-related securities of the companies that fall under the infrastructure sector. It was launched in the year November 2014. The fund is offering direct and regular plans under growth and dividend options.
Tata Infrastructure Fund has the AUM of Rs 627 Cr as on May 31, 2018, with an expense ratio of 2.73%. The average market capitalization of the fund is Rs 23,508.46 Cr as on July 2, 2018. This capital is invested 27.23% in giant companies, 14.03% in large-cap companies, 44.60% in mid-cap companies, and 14.13% in small-cap companies.
Currently, the fund holds the stocks of 41 companies, including equity, equity-related securities, debt instruments, and money-market securities. The top five companies’ stocks in the fund are Larsen & Toubro Construction, Sadbhav Engineering, ICICI Bank, KNR Constructions, and Astral Poly Technik.
Tata Infrastructure Fund G is managed by Mr Rupesh Patel and Mr Abhinav Sharma. They follow the blend of value and growth investing approach for picking up the stocks. They cover various industries to invest in the sector to provide diversification in the mutual fund industry.
Mr Patel has been associated with the fund since 2014. He has more than 17 years of experience in the fund management, portfolio management and equity research. He has also worked as the head of the corporate sector rating group at Credit Analysis & Research Limited (OTCQX:CARE).
Mr Sharma has over 12 years of experience in the finance industry. He is working as assistant work manager of Tata Infrastructure Fund. He joined Tata AMC in 2015 as a research analyst and portfolio manager. He holds PGDCM from IIM Kolkata.
Past Performance Analysis:
The fund has provided the returns of 13.14% since its launch. It has generated the alpha of 6.20% as on May 31, 2018, on the basis of the returns of the past three years.
The trailing return of Tata Infrastructure Fund G in the past three, five and seven years was 7.19%, 15.54% and 7.55%, respectively. The fund has been outperforming its benchmark NIFTY Infrastructure and peers consistently from the past four years. The returns of it in the year 2014 were 63.12%, -0.15% in 2015, 5.29% in 2016 and 42.18% in 2017. As the fund has been providing higher trailing returns than its benchmark, it is good for the long-term investment.
The fund is suitable for the investors seeking long-term capital appreciation under the infrastructure sector, and who have the appetite of tolerating the high-risk. It is a risky fund because the new reforms keep coming on the FDI in the sector. At the same time, the Union Budget also differs every year on the basis of growth in it. Therefore, the investors who have a vast knowledge of the sector are only advised to invest in the sector fund.
The current NAV of Tata Infrastructure Fund Growth is Rs 52.9433 as on July 2, 2018. The investors who want to invest in the fund may park their capital through SIP or lumpsum mode. The minimum SIP amount must be of Rs 500 on a monthly basis, for a minimum period of 12 months. At the same time, if you want to invest via lumpsum mode, the minimum amount must be of Rs 5,000.
Thus, the plan with an efficient fund manager, diversified sector allocation makes it a good scheme, if you want to invest in the infrastructure sector.