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In the past five years, the financial market has seen phenomenal growth in the P/E stocks, which makes the funds to invest in these stocks even in a sluggish economy. One such scheme that is investing in these kinds of stocks is Tata Equity P/E Fund. Due to short-term weigh in the growth of the economy because of GST and demonetisation in the past two years, the growth of companies got obstruct; still these companies will help the fund in the long run. The fund has delivered good returns in the past years consistently, which attract the investors to invest in it. Therefore, the financial experts of MySIPonline have researched about the fund, whose details are provided below:
A Snapshot of Tata Equity P/E Fund:
Launched in the year 2004, the fund is managing the assets of Rs 4,669 Cr as on Jul 31, 2018, with an expense ratio of 2.15%. The fund offered a disciplined way generating profit to the investors with dividend trigger facility, which also avoid the tax liability for them. The fund managers use the parameter of price per earning ratio for screening the stocks across the market capitalisation.
As per the financial experts of MySIPonline, the fund is using this ratio so that investors may know how much price they are paying to buy the share over every rupee of earning. Tata Equity P/E has been investing in 46 companies currently having the portfolio P/E ratio of 19.18%. The average market capitalisation of the fund is Rs 74,014.03 Cr as on Aug 29, 2018. This capital is invested across the market providing 51% in giant companies, 21.22% in large-cap companies, 22.10% in mid-cap, and 4.78% in small-cap companies.
Going overweight from its benchmark in various sectors, it is majorly investing in the financial, automobile, energy, construction, FMCG sector. The sector allocation in cyclical as well as defensive which helps the fund to earn regular profits and long-term growth.
Past Performance of Tata Equity P/E Fund (G)
The fund has a strong track of more than 10 years, betting over the high-risk cyclical stocks. This helps the fund to deliver the returns of 20.76% since its launch. The fund is also capable of managing losses in the adverse market conditions, as when the benchmark, NIFTY 50 Total Return went into negative in the year 2015, the fund has provided the returns of 0.31%.
This all shows that the convictions of the fund managers, Mr Udasi and Mr Sathe have been working efficiently. The compounded returns of tata equity p/e fund for the past three, five, and seven years were 19.69%, 29.58%, and 19.57%. All these returns have managed to beat the benchmark as well as the peers.
As per the financial experts of MySIPonline, the fund has generated the alpha of 4.23% in the past three years, as provided on July 31, 2018. Besides this, the highest returns of the fund were in the year 2011 with 103.59%. The recent past year returns on the basis of calendar years have been provided in the table below:
The returns show that the fund has been consistently performing well, beating its benchmark to offer better returns in the long run. As per the financial experts of MySIPonline, the global economic factors that help the companies in earning is working in favour of convictions and calls of the fund management team. These all strategies let the fund to earn more than peers in the long run.