Rs 10,000 SIP In These 2 Tata Mutual Fund Schemes Can Fetch Returns Up To 52.66%

If you take an SIP of Rs 10,000 in Tata Small Cap Fund and Tata Infrastructure Fund, under direct growth plan options, you can earn returns as high as 52.66% in just three years. Both the funds are the top-performing equity schemes from the fund house. The details of each are given below.

1. Tata Infrastructure Fund

Buying an SIP in Tata Infrastructure Fund - Direct Growth plan will provide you with a return of 43.9%. For a total investment of Rs 3.6 lakh, you build a corpus of Rs 5.18 lakh in three years. This scheme allows a minimum SIP investment amount of Rs 150 and is available in Income Distribution cum Capital Withdrawal (IDCW) and regular plans as well.

About Tata Infrastructure Fund

Tata Infrastructure Fund was launched as early as November 2004 to capitalise on the vibrant Indian economy which has grown on the strength of the positives exhibited by the infrastructure sector. It aims to focus predominantly on sectors that have the potential of creating long-term value from the expected investments in Infrastructure oriented sectors.

It is an equity scheme that has 96.41% investment in domestic equities of which 38.04% is in large cap stocks, 27.68% is in mid-cap stocks and 22.68% is in small cap stocks. The remaining is into cash and equivalents (2.7%).

Being a sectoral equity fund it has 64.37% exposure to infra-related top three sub-sectors which are capital goods, construction and energy. Yet, at the same time, the scheme has very high risk because of the concentrated exposure largely to only one sector.

Suitability

Investing in an infrastructure fund means a lack of diversification, if the sector faces challenging times, so will your investments. Hence one should not allocate more than 10% of the portfolio to this fund category.

This fund is suitable for investors who are aware of advanced knowledge of macro trends and know-how of infrastructure. At the same time, these investors should also be ready for the possibility of moderate to extremely high losses in their investments even though the overall market is performing better. So, if you invest, be prepared to stay invested for at least 7+ years.

Fund Performance

The annualised returns of the scheme over three, five and seven years are higher than the benchmark and almost in line with the category. However, it is an average performer, as per rating agency Crisil which has given it a 3-star rating.

2. Tata Small Cap Fund

Buying an SIP in Tata Small Cap Fund - Direct Growth plan will give you a return of nearly 52.66%. For a total investment of Rs 3.6 lakh, you build a corpus of Rs 5.49 lakh in three years. This scheme also allows a minimum SIP investment amount of Rs 150 and is available in IDCW and regular plans as well.

About Tata Small Cap Fund

Tata Small Cap Fund was launched in as early as July 1995 with a regular option and later in November 2018, the direct plan was launched. It aims to capitalise on growth by investing predominantly in equity and equity-related instruments of growth-oriented future mid-cap companies.

India, in the last decade, has seen consistent growth year on year. Further, the structural long-term growth story of India remains intact. Small cap stocks with strong businesses have also grown significantly in this time frame and have the potential to keep growing in the coming years.

The scheme is an open-ended equity scheme predominantly investing in small cap stocks. It has 88.18% investment in domestic equities, of which 1.88% is in mid-cap stocks and 72.52% is in small cap stocks. The remaining is into cash and equivalents (11.82%).

The scheme has 50 stocks in its portfolio with 5 stocks constituting 17.67% by weight and the top 3 sector weight is 40.69%.

Suitability

Investors who are looking to invest money for at least 3-4 years and looking for very high returns. At the same time, these investors should also be ready for the possibility of higher losses in their investments. It is suitable for investors who are looking to predominantly invest in equity/equity-related instruments of small-cap companies.

Fund Performance

The annualised returns of the scheme over 6 months, 1 year and three years are higher than the benchmark and the category returns. It is one of the very good performers in its category, as per Crisil which has given it a 5-star rating.

Disclaimer

Mutual fund investments are subject to market risk. This write-up is purely informational and doesn't guarantee any return. Greynium Information Technologies or the author will not be liable for any losses caused as a result of a decision based on this write-up.