A new fund offering from Tata Mutual Funds is here. Should you invest?

Tata Multicap Fund NFO details

Tata Multicap Fund NFO details

New Fund Offers (NFOs) are when mutual fund companies launch a new fund scheme for investors. Like IPOs (Initial Public Offerings), the NFO allows a mutual fund scheme to launch itself on the market. During the NFO period, you can subscribe to the fund at a lower NAV. Once the NFO period is over, the NAV is determined by market movements.

Different AMCs come up with NFOs, and the latest to launch its fund is Tata Mutual Fund. The AMC has launched an equity mutual fund called the Tata Multicap Fund. Check out the scheme details before you invest.

Tata Multicap Fund

The fund is an open-ended equity mutual fund. It is categorized as multicap fund since it invests in a mix of small-cap, midcap, and large-cap equity assets. Other details of the scheme are as follows –

  • The NFO goes live on 16th January 2023. The last date of the NFO is 30th January 2023.
  • Once the NFO window closes, the fund will start buying and selling the securities in the portfolio. This will affect the NAV and also the returns.
  • The benchmark index is Nifty 500 multicap 50:25:25 total returns
  • Both regular and direct plans will be available for investment. Moreover, you can invest in the fund in a lump sum or through Systematic Investment Plans (SIPs).
  • The fund managers of the scheme are as follows –
  • Rahul Singh, who will manage the equity component of the portfolio
  • Murthy Nagarajan, who will manage the debt component of the portfolio
  • Arvindkumar Chetty, who will manage the overseas allocation in the portfolio

About the fund’s portfolio

The mutual fund house described the fund’s portfolio as a diversified basket that will offer growth and stability to investors. The management stated that the stocks in the portfolio belong to companies in three different stages of the earnings cycle – Earnings Turnaround, Earnings Stability, and Earnings Upgrades.

This combination of earnings cycle will affect the portfolio in the following manner –

  • Companies having stable earnings will give the portfolio a solid foundation.
  • Companies becoming profitable due to a change in the earnings cycle will help rerate the valuation.
  • Companies whose earnings are getting a turnaround after an adverse situation will aid growth.

The fund house's Chief Investment Officer (CIO), Rahul Singh, stated that the portfolio boasts diversification across market capitalization, investment strategy, themes, and GARP (Growth At Reasonable Price) sectors. This will provide investors with good growth potential while minimizing risks.

Related - Read to know whether you should invest in an NFO or not

The bottom line

Being an equity-oriented fund, the investment risk is high, which is minimized to some extent by the diversified portfolio with securities picked with care. So, assess the fund’s portfolio and align it with your investment needs. If you have a medium to long-term investment horizon, you can invest in the fund to capitalize on the growth in the market in the long run.

Related - Find out what an NFO is and how to invest in one

Check out this video for more details on the Tata Multicap Fund NFO


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