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Is it Good to Invest in Tata Equity P/E Fund for 5 Years?

Posted by dishika on October 5th, 2018

Tata Equity PE Fund

As the market shows negativity in the past month, many investors have shifted to value investing approach because several stocks quoted at premium prices have lost the values. This has made a tool for investors to navigate their investments in the value stocks in the volatile market. But at the same time, some investors are not prone to direct equity investments. For such investors, Tata Mutual Fund has bought Tata Equity P/E Fund, which invests particularly in the value stocks and delivering high returns as well.

The fund buys such stocks from the market, which are trading below their intrinsic value and hold them until they reach their realistic value. It is one of the top performing funds in the value-oriented category, which has given high returns to the investors since its launch. Therefore, the fund has been examined over its portfolio, past performance, and investment strategies to help the investors with their investment decisions.

Is it Good to Invest in Tata Equity P/E Fund for 5 Years?

Portfolio Placement and Investment Strategies Followed by Tata Equity P/E Fund (G)

The fund is aiming at providing high returns to the investors and helping them in capital appreciation, and it has invested its corpus predominantly in the equity and equity-related securities, keeping approximately 5% in debt as well as money market instruments. The debt space provides mandate liquidity to it at any time of the market.

Tata Equity P/E Scheme is not a market-cap biased and has invested across the market cap. The right stocks and sector allocation in the portfolio have helped it in maintaining a successful track record and propelled returns. For stock selection process, the fund depends on various global and economic activities that affect the market and allocate capital based on the secular growth themes which have the ability to outperform in the long-term.


The fund is investing majorly in the finance, energy, and automobile sectors. Keeping the major portion of defensive and cyclical super sectors in the portfolio, it has assured low-risk for the investors in the overall market cycle and economy. It has a small proportion of sensitive sectors as well in its portfolio, which offer growth to the capital keeping a long-term perspective.

As per the fund managers, they select the companies which have high capital efficiency and provide exposure to high-conviction bets. They are bullish on the companies which have sufficient liquidity and a healthy long-term track.

Past Performance and Risk Measures of Tata Equity P/E Fund- Growth Plan

From the past 4 years, the fund has managed to provide high returns to the investors outperforming its benchmark as well as the category’s average. The table presented below also shows that it is capable of offering high returns by compounding the capital of investors in the long run. In short-term as well as in the long run, the fund has given a benchmark-beating performance.

Tata Equity PE Fund

On the contrary, if we look at the risk measures of Tata Equity P/E Plan, it has delivered high alpha in the past three years when its peers have generated negative alpha. However, the Standard Deviation of the fund is higher than its benchmark as well as category, which depicts that it is riskier than other funds of the category.

All these risk measures and returns show that the fund is best to invest with a long-term perspective. A five year investment horizon is best for it because it has given high returns in the five years in the past. However, the past performance of the fund is just for the knowledge, and we cannot depict how the fund will perform in the future. But, we saw that the management team of Tata Equity P/E Fund growth has been adopting the best approach according to the market which will help it to offer good returns to the investors over a period.

Also See: Tata Equity, Equity P, High Returns, E Fund, Tata, Returns, Market

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