Tata Business Cycle Fund NFO
Tata Mutual Fund has announced the launch of the Tata Business Cycle Fund. It is an open-ended scheme that follows a business cycle-based investing theme.
The New Fund Offer (NFO) starts on 16th July 2021 and will end on 30th July 2021. The scheme will reopen for continuous sale and repurchase before 11th August 2021.
The scheme’s investment objective is to generate long-term capital growth by investing its assets in equity and equity-related securities, focusing on riding business cycles through dynamic allocation.
- The fund will be investing a minimum of 80% of its assets in equity instruments based on the business cycle theme.
- The fund will also give exposure to other equity instruments along with debt & money market instruments, gold ETF, REITs, and InvITs.
- The fund will follow the business cycle theme to get benefits from all the different business cycles in the economy.
- Different business cycles in the economy - Expansion, Slowdown, Recession, and Recovery.
Characteristics of Tata Business Cycle Fund
1. Portfolio Size
The size of the portfolio will vary depending on the cycle like in a contractionary cycle, the fund may have more stocks in the portfolio as compared to the expansionary cycle.
2. Sector Allocation
The business cycle theme allows for a more aggressive stance in terms of sector underweight or overweight compared to other funds.
3. Portfolio Churn
The churn in the portfolio will depend on how quickly the cycles are turning. The sudden downswings or upswings may cause higher churn.
4. Market cap allocation
The fund can allocate the assets across the market cap with no constraint on the market cap. The allocation will be purely based on the business cycle.
Tata Business Cycle Fund - Investment Approach
The fund aims to deploy the business cycle approach to investing to identify economic trends and invest in stocks and sectors that are likely to outperform.
2. Economic Trends
Investments are done as per the economic conditions like cyclical during expansion and defensives during contraction.
3. Focus on sector calls
During expansion - The fund will either buy the sector leaders or companies benefitting disproportionately from the sectoral tailwinds.
During contraction - Invest in companies from sectors that provide cushion during downcycles.
4. Stocks selection
- The extent of leverage to the cycle
- Market cap agnostic
- Management record
Who Should Invest?
This scheme is suitable for investors who are -
- Interested in long-term capital growth.
- Interested in investments in a business cycle based investing theme.
- Recommended for investors with an investment horizon of 5 years & above.
Asset Allocation Pattern
|Instruments||Minimum % of total assets (Indicative)||Maximum % of total assets (Indicative)||Risk Profile|
|Equity and equity-related instruments selected on the basis of business cycle||80%||100%||High|
|Other equity and equity-related instruments||0%||20%||Moderate to High|
|Debt & money market instruments and Gold ETF||0%||20%||Low to Moderate|
|Units issued by REITs and InvITs||0%||10%||Moderate to High|
About the Scheme
|Name of the fund||Tata Business Cycle Fund|
|Fund launched by||Tata Mutual Fund|
|Asset Management Company||Tata Asset Management Limited|
|Type of scheme||An open-ended scheme that follows a business cycle based investing theme|
|Investment Objective||The scheme’s investment objective is to generate long-term capital growth by investing its assets in equity and equity-related securities, focusing on riding business cycles through dynamic allocation|
|Benchmark||NIFTY 500 TRI|
|Entry Load||Not Applicable|
-10% units redeemed or switched out within 1 year- NIL
-More than 10% of units redeemed or switched out within 1 year- 1% of applicable NAV
-If units are redeemed or switched out after 1 year- NIL
Taxed as Equity
-If units are redeemed within 12 months, gains are taxed as short term capital gain tax @15%
-If units are sold after 12 months, gains are taxed as long term capital gain tax @10% on the gains exceeding ₹ 1 lakh in a financial year
|Minimum Application Amount||₹ 5,000 & in multiples of ₹ 1 thereafter|
|Minimum Additional Amount||₹ 1,000 & in multiples of ₹ 1 thereafter|
|STP, & SWP||Available|
|Fund Managers||Mr. Rahul Singh|
|Type||Minimum Installments||Minimum Amount|
|Daily SIP||12||₹150 & in multiples of ₹1 thereafter|
|Weekly SIP||12||₹150 & in multiples of ₹1 thereafter|
|Monthly SIP||12||₹150 & in multiples of ₹1 thereafter|
|6||₹1,000 & in multiples of ₹1 thereafter|
|Quarterly SIP||6||₹1,000 & in multiples of ₹1 thereafter|
|4||₹1,500 & in multiples of ₹1 thereafter|