Tata Mutual Fund launches ‘Tata Contra Fund’
October 6, 2005

Tata Mutual Fund announced the launch of a new mutual fund scheme, the Tata Contra Fund, an open-ended equity fund, which aims to invest at least 70 per cent in equity and equity-related instruments of companies using the contrarian investment approach.

Speaking on the occasion, Ved Prakash Chaturvedi, managing director, Tata Mutual Fund, said, "Contrarian investing focuses on identifying and investing in stocks that are fundamentally strong but relatively undervalued due to short-term non-recurrent reasons. With equity market at all time highs, contrarian investing can help investors by diversifying their portfolio and realising long-term value. Past experience over five years bears this out too. In fact, some of the greatest investors globally have been contrarians."

"Tata Contra Fund will focus on a bottom-up approach to stock picking focused on fundamental strength and intrinsic value of stock," he added.

The new fund offer for the scheme has started from September 26, 2005 and the closing date for the offer is October 25, 2005.

Contrarian opportunities in the current market may arise from sectors like oil refining and marketing, pharmaceuticals, fertilisers where short-term negatives overshadow long-term fundamentals or where market has not been able to recognise changing industry fundamentals or value long-term potential as in the case of FMCG, tractor industry and telecom industries.

Tata Contra Fund would be available under two options — Dividend Option with minimum application of Rs 5,000 and in multiples of Re1 and the Growth Option, also having a minimum application of Rs 5,000.

NFO features: An open-ended equity fund. The investment objective is to provide income distribution and / or medium to long term capital gains while at all times emphasising the importance of capital appreciation. However there is no assurance that the investment objective of the scheme will be achieved. Can invest at least 70 per cent in equity and equity-related instruments. Can also invest upto 30 per cent of net assets in debt / money market and securitised debt instruments for providing ongoing liquidity and preservation of capital. Can proactively use permitted derivative strategies.

Options for investment: Dividend Option and Growth Option. Investment Amount: Rs 5,000 and in multiples of Re 1 thereafter. For SIP – minimum investment Rs 1,000 for monthly SIP and Rs 2,000 for quarterly SIP. Maximum amount per installment Rs 5,00,000. Sale at face value of Rs 10 each during the New Fund Offer and thereafter resale / repurchase / switch at prevailing NAV with the applicable load on all business days after scheme reopens for ongoing sales.

Applicable Loads: During New Fund Offer (NFO): Entry load (For SIP and other than SIP): Nil. exit load (For SIP): 2 per cent if redeemed before 365 days from the date of allotment. Exit load (Other than SIP): For investment amount = Rs 2 crore: Nil.

NFO Expenses: NFO expenses not exceeding 6 per cent of the amount mobilised will be charged to the scheme. NFO expenses will be amortised in accordance with SEBI regulations. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio. Risks in using derivatives include the risk of default of counter party, mis-pricing and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. For scheme specific risk factors and other details please read the offer document of the scheme carefully before investing. For offer document and application forms, please contact your nearest collection center / AMC office.

Statutory details: Constitution: Tata Mutual Fund has been set up as a trust under the Indian Trust Act, 1882. Sponsors and settlors: Tata Sons Ltd. & Tata Investment Corporation Ltd. Investment Manager: Tata Asset Management Ltd. Trustee: Tata Trustee Co. Pvt. Ltd.

Risk factors: Mutual Funds and securities investments are subject to market risks and there can be no assurance and no guarantee that the scheme will achieve their objectives. As with any investment in stocks, shares and securities, the NAV of the Units of the Scheme can go up or down, depending on the factors and forces affecting the capital markets. Past performance of the schemes, the sponsors or its group affiliates are not indicative of and do not guarantee the future performance of the scheme. Tata Contra Fund is only the name of the scheme and does not in any manner indicate either the quality of the scheme, its future prospects or the returns. Investment in interest bearing securities are subject to interest rate risk, credit risk and liquidity risk. The sponsors are not responsible or liable for any loss resulting from the operations of the scheme beyond the initial contribution of Rs 1 lakh made by them towards setting up the fund. Please read the offer document carefully before investing. Notwithstanding anything contained in the offering circular the provisions of SEBI (mutual funds) Regulations 1996 and guidelines thereunder shall be applicable. The trustee company would be required to adopt / follow any regulatory changes by SEBI /RBI/ MOF, etc and /or all circulars / guidelines received from AMFI from time to time if and from the date as applicable. The trustee company in such a case would be obliged to modify / alter any provisions / terms of the offering circular during / after the launch of the scheme by following the prescribed procedures in this regard.