How to Get Structural Growth with Tata Infrastructure Fund?

After providing positive approach on the growth of infrastructure sector by India Ratings and Research, the revenue growth will increase in the companies under this sector. This will lead to increased profits of the companies and bull will sustain in the sector. So, if you are looking for investment in the sector, but have no idea which company to go for, then Tata Infrastructure Fund is here to complete your wish and also offer you better returns in the long run. The fund has performed well, yielding consistent returns in the past few years, therefore, it has been researched by the financial analysts of MySIPonline over its returns, past performance, and portfolio. So, in this write-up, we will discuss about the fund, and how it can perform in the future which will give you overview either to invest in the fund or not.

A Brief Outlook of Tata Infrastructure Fund

Description

Details

Launch Date

Dec 31, 2004

Category

Equity: Sectoral-Infrastructure

NAV (As on Sept 21, 2018)

Rs 53.86

AUM (As on Aug 31, 2018)

Rs 600 Cr

Expense Ratio

2.54%

Min. Investment

Rs 5,000

Min. SIP Investment

Rs 500

Return Since Inception

13.05%


Aiming to provide the long-term capital appreciation to the investors, Tata Infrastructure Fund invests in the equity and equity-related securities of the companies which take part in the infrastructure growth story of the country. As the fund is a thematic scheme, it is always suggested to investors who have an appetite of tolerating high risk and also good convictions in the sector. Because, it is a highly volatile sector, which may fall due to many macro and micro factors.

Portfolio Analysis of Tata Infrastructure Fund (G)

With the Government’s focus on infrastructure development, the sector is displaying characteristics of "all weather" businesses. Therefore, the fund has allocated the corpus of portfolio in the growth companies, which may offer long-term capital appreciation to the investors.

Currently, Tata Infrastructure Scheme has an average market capitalization of Rs 28,536.43 Cr (as on Sept 21, 2018) which is invested in 36 companies across the market cap.


As we can see in the pie-chart above, the fund has given good diversification to the portfolio investing in diversified industries. It is overweight benchmark in metals, engineering, chemicals, and financial sectors. However, it is underweight in construction, energy, and services sectors.

Its portfolio designing shows that the fund management team is taking high calls in the mid-cap space, doing the right stock selection in different segments. They have taken the aggressive calls on the companies with leverage balance sheet, free cash flows, de-leveraging transactions, and also unlocked value investing approach for some companies.

Past Performance Analysis of Tata Infrastructure Fund (G)

Fund/ Benchmark

Trailing Returns (in %)

3 Yrs

5 Yrs

7 Yrs

Tata Infrastructure Fund

8.97

17.08

9.62

NIFTY Infrastructure TRI

4.25

8.31

3.56

Category

8.90

17.85

9.96

*As on Sept 19, 2018

If we look at the calender year returns of the fund, it was a difficult time for it during the period 2008 to 2013. However, the fund’s calls were performing well in the past many years and also capped the losses better in the year 2015, when the benchmark was negative. However, in the long-term trailing returns, Tata Infrastructure Fund growth has always outperformed its benchmark and provided competitive returns as compared to its category’s average.

As the infrastructure is a cyclical sector and may underperform in a few years and show growth in the other, it is always suggested to take calls in the fund after consulting any mutual fund expert. Therefore, if you are looking for investment in Tata Infrastructure Fund, then you may connect with our experts at MySIPonline via call or email.


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