Published on 21/02/2020 5:50:19 PM | Source: SAMCO Securities Ltd

Mutual Fund Analysis : The Hidden Gem & The Rising Star – ‘Tata Ethical Fund-Growth’ and ‘Motilal Oswal Nifty 500 Fund-Regular Growth’ by Omkeshwar Singh, Samco Securities

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Below is the Views On Mutual Fund Outlook by Mr. Omkeshwar Singh, Head of Rank MF, Samco Securities

Industry Update

 * The average AUM of overnight mutual fund schemes has grown five times over the last 10 months to Rs 52,524.98 crore as on January 31, 2020 from Rs 11,566.84 crore as on April 30, 2019. The number of folios under overnight funds at 46,763 as on January 31, 2020, has more than doubled in the last 10 months, from 21,363 as on April 30, 2019.

 * UTI MF and Nippon India MF side-pocketed their exposures to Vodafone Idea in a bid to prevent the distressed assets from damaging the returns generated from more liquid and better-performing assets. CARE ratings downgraded to 'BB, which is below the investment grade. UTI AMC said its board of trustees approved the creation of segregated portfolio in five schemes and Nippon India MF, separately, said it has decided to create segregated portfolio of securities of Vodafone Idea held in three schemes with effect from February 17, 2020.

 * SEBI has revised PMS (Portfolio Management Services) regulations in which it has asked PMS players not to charge upfront fees from their clients. They will now charge brokerage at actual from clients. The other key changes to regulations include operating expenses not exceeding 0.5% per annum on daily average AUM, introduction of graded exit load structure i.e. PMS’ can charge exit load of 3% of the amount redeemed in first year, 2% in second year and 1% in third year. There will be no exit load after three years.


The Hidden Gem – ‘Tata Ethical Fund-Growth’

Tata Ethical Fund is an open-ended equity thematic scheme following Shariah principles.

Shariah-compliant mutual funds forbids investments in businesses that make a major portion of its income by selling alcohol, tobacco, pork, weapons and other. They are considered to be a type of socially responsible investing.

It is rated 4-star by RankMF, having a growth of 15.25% since inception, and having an AUM of Rs.578.94 cr. The rating and ranking helps identify mutual fund schemes standing strong on all parameters. This fund has a good long term track record and has outperformed its benchmark over multiple times.

The above fund is not ranked and rated on most of the rating agencies and mutual fund research houses. Whereas RankMF ranks all funds out there that does not consider past performance, but follows the bell-curve for rating and ranking mutual funds.

The investment objective of the scheme is to provide medium to long-term capital gains by investing in Shariah compliant equity and equity related instruments of well-researched value and growth-oriented companies. Few of the top holdings of the portfolio of the fund are TCS, Hindustan Uniliver, Infosys, Asian Paints and Bata India.

The Rising Star – ‘Motilal Oswal Nifty 500 Fund-Regular Growth’

* RankMF rates and ranks relatively new funds as well.      
Motilal Oswal Nifty 500 Fund is an open-ended scheme replicating Nifty 500 Index. The NFO opened on August 19, 2019 and closed on August 30, 2019. The fund is rated 4-star by RankMF, having a growth of 10% since inception, and the timing for investment is also appropriate.

The scheme seeks investment return that corresponds to the performance of Nifty 500 Index subject to tracking error. It is the first low cost multi cap index fund in India. It has 97.86% investment in Indian stocks of which 69.56% is in large cap stocks, 13.26% is in mid cap stocks, 7.08% in small cap stocks.

NIFTY 500 Index is computed using free float market capitalization method, wherein the level of the index reflects the total free float market value of all the stocks in the index relative to particular base period. Owning an index inherently lowers the risk as compared to actively managed funds as there is no fund manager bias and the portfolio is more managed than an actively managed fund.

The top holdings of the fund are HDFC Bank, Reliance Industries, Tata Consultancy Services, ICICI Bank, Infosys, ITC Limited, Axis Bank. etc.


Above views are of the author and not of the website kindly read disclaimer   


Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.

 The risk of the fund currently is moderately high.


*  AUM – Rs. 29.40 crore

Union Focused Fund Regular Plan - Growth Option AUM is 89% lower than other schemes in the category


*  Expense ratio – 1.03%

Union Large And Midcap Fund Regular Plan - Growth Expense Ratio is 94% lower than other schemes in the category


* Turnover Ratio – 8%

Motilal Oswal Nifty 500 Fund-regular Growth Turnover Ratio is 81% lower than other schemes in the category



Above views are of the author and not of the website kindly read disclaimer   


Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.