Risk and return in investing are like two sides of a coin. If you take risks, you can expect better returns. Mutual funds are the answer if you lack experience in financial analysis or lack the time to invest directly in equities. Invest without technical issues as they are managed by professional fund managers. Investing through a systematic investment plan with a long-term objective can also reduce the risk of loss.
There are different types of mutual funds in the market under different schemes. Tata Banking and Financial Services Fund is a sectoral fund that invests in the banking and financial services sectors. The fund has performed well over the long term. Launched on 28th December 2015, the fund has grown at a CAGR of 13.57% as it is about to complete 7 years. Let’s evaluate the details and performance of the fund.
Tata Banking and Financial Services Fund
The Net Asset Value of Tata Banking and Financial Services Fund as on October 1, 2022, is Rs 32.25 crore. The fund’s AUM as on 31 October 2022 is Rs 1196.24 crore. The fund is benchmarked against Nifty Financial Services TRI Index. The expense ratio of Tata Banking and Financial Services Fund Direct Plan is 0.61 percent and that of the regular fund is 2.31 percent. Being a sectoral fund, it is a high-risk fund.
Tata Banking and Financial Services Fund returned 20.42% on a 1-year SIP investment. 1.32 lakh through a monthly SIP of Rs 10,000. This gain is from an investment of 1.20 lakhs. A person who invests Rs 3.60 lakh through SIP for three years gets Rs 4.63 lakh. Gain of 17.09 percent.
6 lakhs invested through five-year SIP grew to Rs 8.37 lakhs. The investment of Rs 8.20 lakh in seven years has reached Rs 13.13 lakh. 13.57 percent profit has been given during this period.
Investment of Fund
As Tata Banking and Financial Services Fund is a sectoral fund, around 80 percent of the investment is in stocks of financial positions. Allocation of the fund is mostly in banks, capital market, financial, and insurance sectors.
ICICI Bank, HDFC Bank, Axis Bank, SBI, HDFC Ltd., Kotak Mahindra Bank, Karur Vysya Bank, IDFC. The fund’s top 10 holdings are First Bank, RBL Bank and SBI Cards and Payment Services. 72.99 percent of the investment is in large cap stocks, 8.70 percent in mid cap stocks, and 18.31 percent in small cap stocks.
Notice: The above article is based on various reports and is for study purposes. Before taking investment decisions in this regard, the advice of a financial expert can be sought. Investing in the stock market and mutual funds is subject to potential losses. Take investment decisions at your own risk only. E-News Hub and the author are not responsible for any profit or loss based on the decision taken after reading the article.