Tata Mutual Fund has introduced the Tata BSE Quality Index Fund, a factor-based index fund. This fund allows investors to invest in high-quality companies with strong financials and excellent performance.
Key Features of the Fund
The New Fund Offer (NFO) is currently open for subscription and will close on March 28. This fund aims to select the top 30 companies based on key parameters such as strength, profitability, and operational efficiency. These factors are expected to enhance the investor experience.
The fund will replicate the BSE Quality Index, which includes companies selected based on high return on equity (RoE), low financial leverage, and low accrual ratio. This approach is designed to provide stable and long-term growth for investors.
Investment Details and Benefits
The investment objective of the scheme is to deliver returns similar to the BSE Quality Total Return Index (TRI) before expenses, though there may be slight tracking errors. The fund’s benchmark index is the Nifty Large Midcap 250 TRI, and it will be managed by Kapil Menon and Rakesh Prajapati.
Minimum investment: ₹5,000 (additional investments in multiples of ₹1)
Exit load: 0.25% if withdrawn within 15 days from the allotment date
Anand Varadarajan, Chief Business Officer of Tata Asset Management, expressed enthusiasm about the launch.
He stated that the Tata BSE Quality Index Fund offers investors a unique opportunity to invest in high-quality companies.
This is Tata’s third factor-based index fund, reinforcing its commitment to providing diverse investment options.
Why Choose Factor-Based Investing?
Factor-based investing, also known as smart beta investing, focuses on specific factors such as quality, value, or momentum.
The quality factor has proven to be more resilient during economic uncertainty, helping investors maintain stability during market fluctuations.
With the current market conditions, a quality-focused portfolio can offer long-term growth by relying on strong and consistent fundamentals.
Tata Mutual Fund aims to provide investors with a stable and growth-oriented investment option through this new fund.