January 09, 2019

Tata Mutual Fund launches Tata Balanced Advantage Fund

NFO opens on January 09, 2019, and closes on January 23, 2019

Mumbai: Tata Mutual Fund announces the launch of Tata Balanced Advantage Fund, an open-ended dynamic asset allocation fund. The investment objective of the scheme is to provide capital appreciation and income distribution to the investors by using equity derivatives strategies, arbitrage opportunities and pure equity investments.

An ideal investment scenario is to buy low and sell high. In reality however, investors have struggled to do so. Also investors get swayed by emotions and often observe that their investment returns are much lower than fund returns. Hence there is a need for investing in a fund with managed equity allocation.

Usually, various models are used for asset allocation like PE Based Model and PE + PB Model.

We have come up with an in-house model called the PE Plus Model which would factor in other market dynamics other than intrinsic value.

Tata Mutual Fund Model allows 10 percent variation to the basic PE based equity allocation, driven by:

  • Correlation to select global markets (relevant to Indian equities).
  • Implied volumes (to identify extremes — fear vs complacency).
  • Momentum indicators (price-based indicators to avoid early entry / exits in a directional market).

Speaking on the launch, Rahul Singh, CIO, equities, Tata Asset Management, said that "the basic goal of the strategy is to be able to manoeuver the investment allocation as per prevailing market conditions to make money work harder. Tata Balanced Advantage Fund would make use of various alternative models depending upon macro and fundamental factors, and fund manager outlook to determine the unhedged equity allocation."

The new fund offer (NFO) opens on January 09, 2019, and closes on January 23, 2019. The face value of the unit is Rs10 and the NFO application requires a minimum application amount of Rs5,000 and in multiple of Re1 thereafter. The scheme will re-open for continuous sale and repurchase not later than February 01, 2019.

Fund facts:

Scheme name Tata Balanced Advantage Fund
NFO dates January 9, 2019, to January 23, 2019
Investment objective The investment objective of the scheme is to provide capital appreciation and income distribution to the investors by using equity derivatives strategies, arbitrage opportunities and pure equity investments
Type of scheme An open-ended dynamic asset allocation fund
Category of scheme Balanced advantage
Fund managers Equity: Rahul Singh and Sonam Udasi
Hedged equity / arbitrage: Sailesh Jain
Debt: Akhil Mittal
Benchmark CRISIL Hybrid 35+65 -Aggressive Index
Minimum investment amount Rs5,000 and in multiple of Rs1 thereafter
Load structure Entry load: NA; exit load: 1 percent of the applicable NAV, if redeemed on or before expiry of 365 days from the date of allotment
Plans and options Regular and direct plans with growth and dividend options