Tata MF launches six passive funds to capture India growth
Tata Asset Management Company has launched a suite of six index funds that provides an opportunity for invest in high growth sectors in a calibrated manner without the risk of fund manager bias.
The six newly launched include Tata Nifty 500 Multicap 50:30:20 Infrastructure Index Fund; Nifty MidSmall Healthcare Index; Tata Nifty Realty Index; Nifty Financial Services; Nifty Auto Index and Nifty 500 Multicap India Manufacturing 50:30:20 Index.
Each index fund adheres to a meticulous methodology to ensure optimal performance and representation of the respective sectors. The construction of the indices involves careful selection criteria, including market capitalisation, sectoral representation and periodic reviews, said the fund house. The passive funds will replicate the benchmark index.
The NFO will be open for subscription between April 8 and 22. It will reopen for further subscription on April 30. Tata AMC has assets of about ₹2,000 crore under passive management.
Anand Vardarajan, Business Head at Tata Asset Management told businessline that while all the new launches will also benefit from India’s growth, the three funds on infrastructure, health care and manufacturing in multi-cap category is industry first and is best suited for capturing the opportunity across market as the winner can emerge from across market-cap.
“We think there is space for both passive and active portfolios. In a narrow market where a handful of index heavy weights perform, like in 2018/19 passive funds may do far better while in a broad market rally, like what followed, active funds may have an advantage,” he said.
Besides traditional MF distributors, he said several RIAs, financial advisors and digital platforms look at some of these kind of differentiated ideas.
“In fact, in the recently launched Gold and Silver FOF we were enthused by the SIPs registered and so there is definitely growing retail participation in passive funds,” he said.