Tata Ethical Fund: Investing In A Brighter Future

The Tata Ethical Fund is an open-ended equity mutual fund plan that invests in stocks of companies adhering to Islamic (Shariah) principles. The fund has a diversified portfolio of companies that are in harmony with the principles of Shariah on investments. It has a track record of more than 25 years and is suitable for investors seeking medium to long-term capital gains. The fund has no lock-in period and the minimum one-time investment is ₹5,000. The minimum SIP amount to invest in the Tata Ethical Fund is ₹100. The fund has delivered a CAGR of 17.24% since its inception in January 2013.

How to invest in Tata Ethical Fund online

Tata Ethical Fund is a diversified equity fund that seeks to invest in stocks that follow Shariah principles of investment. The fund has a track record of more than 25 years and is categorized as an Ethical Fund since 2011.

The fund aims 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. The fund does not follow any market cap bias and has a portfolio of fundamentally strong stocks with low leverage.

To invest in the Tata Ethical Fund online, you can follow these steps:

• Visit the Tata Mutual Fund website or a trusted online platform that offers mutual fund investments, such as Angel One or Groww.
• Log in to your account or create a new one if you don't have an existing account.
• Select the "Tata Ethical Fund" from the list of available mutual fund schemes.
• Choose the type of investment you want to make: Systematic Investment Plan (SIP) or a one-time investment.
• Enter the investment amount. For a SIP, you will also need to select the frequency of investment (monthly, quarterly, half-yearly, or annually). The minimum SIP amount for the Tata Ethical Fund is 100.
• Proceed to the payment section and choose your preferred mode of payment.
• Review your investment details and confirm the transaction.
• Your portfolio will be updated with this investment within a few working days.

It is important to note that investing in mutual funds, including the Tata Ethical Fund, carries a certain level of risk. Before investing, it is recommended to carefully read all scheme-related documents and understand the associated risks and charges, such as the exit load and expense ratio.

What is the minimum investment amount?

The minimum investment amount for the Tata Ethical Fund depends on whether you are a new or existing investor. For new investors, the minimum investment amount is ₹5,000, and for existing investors, the minimum investment amount is ₹1,000.

The minimum SIP amount for the Tata Ethical Fund - Regular Plan is ₹150. The minimum lumpsum investment is ₹5,000.

What is the fund's expense ratio?

The expense ratio of the Tata Ethical Fund is 1.91% as of October 16, 2024. This is the annual fee that the fund charges you to manage your money. This fee is deducted from the Net Asset Value (NAV) on a daily basis and is not paid explicitly by the investor. The expense ratio for the Tata Ethical Fund - Regular Plan - Growth is stated to be 1.95% on one source and 1.91% on another. The Tata Ethical Direct Plan Growth fund has an expense ratio of 0.67%.

The expense ratio is an important factor to consider when investing in mutual funds, as it affects the returns generated for investors. Regular funds tend to have a higher expense ratio compared to direct funds due to the commission paid to brokers/distributors. As such, direct funds offer higher returns to investors.

What are the historical returns?

The Tata Ethical Fund has demonstrated strong historical returns. As of 16 October 2024, the fund's NAV (Net Asset Value) was ₹426.8343, with a total return of 15.65% over the last 3 months, 35.50% over the last year, 54.86% over the last 3 years, and 550.98% since its launch. The fund has also outperformed its category average in the last 10 years, with a 10Y annualised return of 0.21% higher than the category average.

In terms of absolute returns, an investment of ₹10000 in the Tata Ethical Fund one year ago would have yielded a profit of ₹2000, with today's mutual fund price (NAV) reflecting the profit from the returns.

The fund's performance can also be evaluated through a comparison with its benchmark, the NIFTY 500 Shariah Total Return Index. The fund has generated higher returns than this benchmark over the last 3 years.

Additionally, the fund has a strong track record of capital gains, with returns of 34.43% over 1 year, 14.78% over 3 years, 22.27% over 5 years, and 16.73% since its launch.

How does the fund compare to its peers?

The Tata Ethical Fund compares favourably to its peers in most aspects. It has a Value Research Rating that suggests the fund's returns are currently better than the category average. The fund's portfolio is largely conservative, with holdings mostly in Large Cap stocks and in debt instruments, indicating a conservative investment strategy.

The fund has a 3-year return of 15.76% and a 10-year annualised return that is 0.21% higher than the category average. It has a lower expense ratio of 0.67% or 0.68% (according to another source) compared to its peers, and it has generated higher returns than the benchmark NIFTY 500 Shariah Total Return Index over the last 3 years.

The fund's minimum SIP amount of 100 is also lower than that of its peers, making it more accessible to investors.

However, it is important to note that the fund has consistently lower annualised returns than the category average for the past 1, 3, and 5 years.

Some similar funds to the Tata Ethical Fund include:

• Samco Special Opportunities Reg-G
• Samco Active Momentum Reg-G
• Mirae Asset Great Consumer Reg-G
• Mirae Asset Healthcare Reg-G
• Canara Robeco Manufacturing Reg-G
• Canara Robeco Consumer Trends Reg-G

Frequently asked questions