Tata Aia Multi-Cap Fund: Smart Investment Strategy

The Tata AIA Multi-Cap Fund is an open-ended dynamic equity scheme that offers investors exposure to large-cap, mid-cap, and small-cap stocks. The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of companies with different market capitalizations. It is important to note that the Tata AIA Multi-Cap fund has been renamed the Tata AIA Flexi Cap Fund. This fund is suitable for investors with a long-term investment horizon who seek medium-to-long-term capital appreciation and are comfortable with the associated risks.

Understanding the fund's investment rationale and strategy

Understanding the funds investment rationale and strategy

The Tata AIA Multi-Cap Fund, now known as the Tata AIA Flexi Cap Fund, is an open-ended dynamic equity scheme. This means the fund has the flexibility to invest across all segments of the equity market, including large-cap, mid-cap, and small-cap stocks. The fund's primary investment rationale is to generate long-term capital appreciation by investing in a diversified portfolio of companies across these different market capitalisations.

The allocation of investments between large-cap, mid-cap, and small-cap companies will depend on the relative valuations between different market caps. This diversification helps to reduce portfolio risk and maximise investor returns. It also allows fund managers to explore a wider range of investment opportunities without being restricted by market capitalisation.

The Tata AIA Flexi Cap Fund focuses on investing in businesses with high growth potential or those already experiencing high growth rates. Additionally, the fund targets companies with sustainable business models, meaning they possess a competitive advantage and long-term viability in their industry.

The fund is managed by Tata Asset Management, which has over 25 years of experience in the investment and asset management business. It is also sponsored by Tata Investment Corporation Limited (TICL) and Tata Sons Limited (TSL).

The main advantages of investing in the Tata AIA Flexi Cap Fund include:

• Diversity: The fund offers exposure to all segments of the equity market, helping to mitigate risk and maximise returns.
• Returns: The fund has delivered strong and consistent returns, providing investors with an opportunity to analyse the fund manager's performance.
• Medium-to-long-term investment scope: The fund aims to generate capital appreciation over the medium to long term, helping investors reduce volatility risk and benefit from compounding returns.
• Track record: The fund was launched in 2018 and has consistently delivered good returns since its inception.
• Experienced fund management: The fund is managed by experienced professionals with extensive knowledge of equity markets and asset management.

Overall, the Tata AIA Multi-Cap Fund (now the Tata AIA Flexi Cap Fund) provides investors with a strategically diversified portfolio, offering investment opportunities across different market segments. The fund's investment rationale and strategy centre on long-term capital appreciation through investments in a diverse range of companies, with a focus on high growth potential and sustainable business models.

Knowing the benefits and risks of investing in the Tata AIA Multi Cap Fund

The Tata AIA Multi-Cap Fund has been renamed the Tata AIA Flexi Cap Fund. This fund is an open-ended dynamic equity scheme that offers investors exposure to all segments of the equity market, including large-cap, mid-cap, and small-cap stocks.

Benefits

• Diversity: The fund offers exposure to all market segments, helping to reduce risk and maximise returns. This diversification also allows fund managers to explore better investment opportunities without being restricted by market capitalisation.
• Returns: The Tata AIA Flexi Cap Fund has delivered good returns since its inception in 2018. For example, in 3 years, the fund has delivered a 21.77% return.
• Medium-to-long-term investment: The fund aims to generate capital appreciation over the medium to long term. Long-term investments can help reduce volatility risk and increase returns through the power of compounding.
• Track record: The fund has a good track record, allowing investors to analyse the performance delivered by the fund manager.
• Experienced management: The fund is managed by Sonam Udasi and Abhinav Sharma, who have 25 and 14 years of experience in the equity and asset management business, respectively.

Risks

• Investment and liquidity risk: As with any investment in equities, there is a risk of losing money due to market fluctuations or changes in the financial health of the businesses the fund invests in.
• Not suitable for short-term investors: The fund is designed for medium-to-long-term investment horizons and may not be suitable for those seeking short-term gains.

How to buy the Tata AIA Multi Cap Fund

The Tata AIA Multi-Cap Fund has been renamed the Tata AIA Flexi Cap Fund. It is an open-ended dynamic equity scheme that offers investors exposure to large-cap, mid-cap, and small-cap stocks. The fund aims to generate long-term capital appreciation and is suitable for investors with a medium- to long-term investment horizon.

To buy the Tata AIA Multi Cap Fund, you can follow these steps:

• Understand the fund: Before investing, it is important to understand the investment objective, strategy, and risks associated with the fund. The Tata AIA Multi Cap Fund seeks to generate long-term capital appreciation by investing in a diversified portfolio of large-cap, mid-cap, and small-cap companies. The fund offers the potential for higher returns but also carries a higher risk compared to investing solely in large-cap stocks.
• Evaluate your risk profile: Assess your risk tolerance and ensure that it aligns with the risk profile of the fund. Multi-cap funds invest in equities, which carry a higher risk than fixed-income investments. Consider your financial goals, investment horizon, and risk appetite before investing.
• Choose an investment option: The Tata AIA Flexi Cap Fund offers two investment options: Income Distribution cum Withdrawal Option (IDCW) and Tata AIA Flexi Cap Fund (Direct-Growth). The IDCW option further provides a choice between payout, reinvestment, and transfer of dividends. Consider your financial goals and tax implications when selecting an option.
• Meet the minimum investment requirements: The minimum initial investment for the Tata AIA Flexi Cap Fund is Rs. 5,000. For Systematic Investment Plans (SIP), the minimum investment is Rs. 150, while for lump-sum investments, it is Rs. 5,000. Ensure you have the necessary funds to meet these requirements.
• Purchase the fund: You can purchase the Tata AIA Multi Cap Fund during the subscription period, which can range from a day to a few weeks. Contact Tata AIA Life Insurance or an authorized financial advisor to initiate the purchase process and provide the required documentation and funds.
• Monitor your investment: After purchasing the fund, regularly review its performance and track its Net Asset Value (NAV). You can find the daily NAV for the fund on the Tata AIA website or through authorized sources. Remember that investments are subject to market risks, and past performance does not guarantee future results.

By following these steps, you can invest in the Tata AIA Multi Cap Fund. Remember to carefully consider your financial goals, risk tolerance, and investment horizon before investing, and seek professional advice if needed.

Performance and returns of the fund over time

The Tata AIA Multi-Cap Fund has been renamed the Tata AIA Flexi Cap Fund. This fund was launched on 17 August 2018 and is managed by Tata Asset Management, which has over 25 years of experience in the investment and asset management business. As of 15 November 2021, it manages around ₹2,159 crore (AUM).

The Tata AIA Flexi Cap Fund offers two investment options: the Income Distribution cum Withdrawal Option (IDCW) and the Tata AIA Flexi Cap Fund (Direct-Growth). The former offers further options: IDCW Payout, IDCW Reinvestment, and IDCW Transfer.

The fund's primary objective is to offer capital appreciation by investing in equity markets and stocks across market caps. It focuses on investing in businesses with high growth potential and a sustainable business model.

As of 11 November 2021, the fund has delivered good returns. Here is a look at its performance since its inception:

• In three years, the fund has delivered a 21.77% return. This means that an investment of ₹10,000 would have earned approximately Rs 18,055.97, or about 1.8 times the initial investment.
• As of 11-Sep-2024, the absolute returns were 41.4%. The NAV on 12-Sep-2023 was Rs 45.8997, and it increased to Rs 64.8953 on 11-Sep-2024.
• The 52-week high was 65.3000 on 05-Sep-2024, and the 52-week low was 44.8000 on 26-Oct-2023.
• The fund has a rating of 5 stars from Morningstar as of 30 April 2024. This indicates that the fund has been among the market's top performers in terms of risk-adjusted returns.

The Tata AIA Flexi Cap Fund aims to generate wealth for investors over a mid- to long-term time horizon. It is suitable for investors seeking medium-to-long-term capital appreciation and is not intended for those with a short-term investment horizon. The fund offers a strategically well-diversified portfolio of equity investments and has provided good and consistent returns.

Who should invest in the Tata AIA Multi Cap Fund

The Tata AIA Multi Cap Fund is suitable for a variety of investors, depending on their financial goals and risk appetite. Here are the types of investors who may consider investing in the Tata AIA Multi Cap Fund:

Long-Term Investors

The Tata AIA Multi Cap Fund is ideal for investors with a long-term investment horizon, typically those looking to invest for five years or more. These investors can benefit from the fund's objective of capital appreciation over the medium to long term.

First-Time Investors

This fund is a good option for individuals who are new to investing and seeking diversification. The fund offers exposure to various market segments, including large-cap, mid-cap, and small-cap stocks, providing a well-diversified portfolio.

Diversified Portfolio Seekers

Investors looking to diversify their portfolio across different sectors and market capitalizations can benefit from the Tata AIA Multi Cap Fund. The fund provides exposure to a range of companies, reducing the need to manage multiple funds.

Retirement and Long-Term Goal Planners

Those planning for long-term financial goals, such as securing their retirement, funding their children's education, or buying a home, can consider the Tata AIA Multi Cap Fund. The fund's objective of medium to long-term capital appreciation can help investors work towards their financial milestones.

It is important to note that investing in the Tata AIA Multi Cap Fund carries certain risks, including investment and liquidity risks. Investors should carefully consider their financial goals, risk tolerance, and investment horizon before making any investment decisions.

Frequently asked questions