Money Today-Plexus Management new fund evaluation brings to you at the analysis of Tata Infrastructure Tax Saving Fund.
- Offer open: Till 16 March
- Scheme type: 10-year, closed-ended infrastructure equity
- Minimum investment: Rs 500; unit price: Rs 10
- Loads: Entry load: 2.25%; Exit load: Nil
- Options: Growth and dividend (reinvestment & payout)
- Investor grievances: Latha Rajaraman. Tel: 1800-209-0101; Fax: 22613782, E-mail: firstname.lastname@example.org
- Objective: To provide medium- to long-term capital gain by investing mostly in equity and equity- related instruments of infrastructure companies and related sectors. Also, to offer income-tax benefit to unit-holders.
- Benchmark: BSE Sensex
- Fund managers: Venugopal M. and Mahendra Jajoo
- Asset allocation: 80-100% - Equity & equity-related securities. Of this, 65-100% in infrastructure & related companies | 0-20% - Debt & cash.
- Comparable existing schemes: Fund name: Tata Tax Advantage Fund, NAV* (Rs): 7.96 , 6-month return(%): -25.14, 1-year return(%): -48.06
- Idea distiller: The infrastructure sector is still relevant and can outdo market returns. Tata AMC has successfully managed its infrastructure equity funds and has launched the present fund as an extension of the theme.
- Fund house report: Tata AMC manages assets worth Rs 17,556 crore across 94 schemes (as on 31 December 2008).
- Fund managers’ report: Returns profile: 3/5, Risk profile: 3/5
- Scheme DNA: Four fundamentals of the fund scheme. Unique idea - Medium | Returns possibility - Medium | Risk - Medium | Operability/Complexity - Medium
Investor takeaways: Who should apply: If you believe that the infrastructure theme has potential and are willing to wait, then this is a good fund. However, the 10-year period is extremely long. If you are looking only at tax saving, go for a fund with a high NAV. At least, you will get some dividend while you are locked in.
Comments: The fund house already has an ELSS, besides a closed-ended ELSS and some infrastructure funds. So, launching a fund that overlaps with the existing themes doesn’t appear to be a prudent move.