Tata Mutual Fund’s Multi Asset Opportunities Fund was launched on February 14th. The scheme is a Hybrid Multi Asset Allocation fund, seeking to invest in exchange-traded commodity derivatives (ETCDs) as well. The minimum amount for investment in the fund is Rs 5,000 in lump sum and Rs 1,000 for a monthly investment via SIP. The NFO for the scheme will end on February 28th, 2020.
The open-ended scheme is suitable for you only if your investment horizon is for the long-term (at least 5 years) and you can handle moderately high risk to their capital. The scheme will invest in equity and equity-related instruments, ECTDs and debt instruments hence allowing better risk-adjusted returns. It is advisable to consider your existing portfolio and seek advice before investing in the fund. Another point to be noted is that do not allocate all of your investments into a single fund.
Since the fund will invest in equity and equity-related instruments, the risk-o-meter for the scheme stands at moderately high. Nonetheless, investors will have access to industrial chemicals, base metals, agricultural products and crude oil via investment in ETCDs.
Rahul Singh who is the CIO-Equities, at Tata Asset Management believes that negative correlation between different assets offsets the risk that all investments fail at the same time, exhibiting stability to the portfolio. Returns consistency and risk reduction is also possible with the diversification and low correlation across equity, commodities, fixed income as well as returns in commodity arbitrage.
The fund managers will allot a maximum of 10% of the AUM to one commodity.; 25% of the AUM is reserved for investment in ETCDs. Since it is a mutli asset allocation fund, respective fund managers will handle their categories. Rahul Singh will be the Chief Investment Officer for Equities, Murthy Nagarajan if the Head of Fixed Income, Aurobinda Prasad Gayan, will head Commodities Strategy. Sailesh Jain who is the Fund Manager at Tata Asset Management will also contribute with his expertise.
According to the CEO and MD of Tata Asset Management, Prathit Bhobe, the scheme “is a small step that will add up to the Rs. 100 Trillion opportunity, all of us are trying to tap into. We are sure that this product will generate interest from existing investors and distribution partners, as well as bring in newer investors. After our AI / ML powered Quant Fund, this is second amongst the innovative products we had planned for this FY. Our Multi Asset Fund consisting of equity, debt and commodity derivatives is an Industry first and allows many investors to venture into a new asset class for long term wealth creation.”
Other Funds by Tata Asset Management
| Scheme Name | 3 Years Returns (%) | AUM(Rs. Cr.) | Category |
| Tata Index Sensex Direct | 14.28 | 5.04 | Large Cap Fund |
| Tata Retirement Savings Fund Progressive Plan | 14 | 451.51 | Multi Cap Fund |
| Tata India Tax Savings Fund | 13.21 | 1398.27 | ELSS |
| Tata Retirement Savings Fund Moderate Plan | 11.94 | 659.89 | Aggressive Hybrid Fund |
| Tata Large & Mid Cap Fund | 11.66 | 1297.88 | Large & Mid Cap Fund |
| Tata Midcap Growth | 11.28 | 692.48 | Mid Cap Fund |
| Tata Large Cap Direct Plan | 10.84 | 799.42 | Large Cap Fund |
| Tata Retirement Savings Fund Conservative Plan | 8.91 | 133.5 | Conservative Hybrid Fund |
| Tata Equity PE Fund | 8.85 | 3519.81 | Value Fund |
| Tata Gilt Securities Fund | 8.1 | 117.76 | Gilt Fund |
{Data as on Feb 17, 2020; Source: Value Research}