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Tata India Consumer Fund: Fund Review
Wed, Nov 22, 2017
Source : Yash Jashnani, Citrus Interactive

TATA India Consumer Fund is an open ended thematic fund. The investment objective of the scheme is to seek long term capital appreciation by investing at least 80% of its net assets in equity/equity related instruments of companies in the consumption-oriented sectors in India such as automobiles, media and entertainment, consumer durables and FMCG , textiles. The fund has an AUM of Rs 307 crore as on 31st October 2017 which has increased by Rs 214 Crores in the last year.

Performance

The fund’s performance across various time horizons is very good as seen in the table given below. It has beaten its benchmark throughout the time horizon in all time periods. It has done better than the category average in all time periods.

Scheme Name

YTD

6 Months

1 Year

Since Inception

TATA India Consumer Fund

58.2

20.61

43.49

31.1

NIFTY CONSUMPTION

33.53

14.36

21.98

15.98

Category Average**

33.96

12.29

23.86

N.A.

Rank

1/11

1/11

1/11

N.A.

Figures are in % as on 31st October 2017; Returns above 1 year in Compounded Annual Growth Rate (CAGR)

*The scheme was launched on 28th December 2015, hence the 3 year& 5-year period data is not available.

** The category is made of 11 Thematic Funds such as Canara Robeco Force Fund, Sundaram Rural India Fund, ABSL India Reforms etc.

In terms of the calendar year returns the fund has beaten its benchmark as well as category average in 2016.

Scheme Name

2016

TATA India Consumer Fund

14.03

NIFTY CONSUMPTION

7.57

Category Average

11.12

Rank

6/11

 

Risk: In terms of measures of risk such as standard deviation (measured over the last 3 years) the fund has taken lower risk and in term of Beta (measured over the last 3 years), the fund has taken higher risk compared to its category median.

 

Standard Deviation

Beta

TATA India Consumer Fund

0.29

0.99

Category Median

0.86

0.92

 

Risk-Adjusted Return: In terms of Treynor and Sharpe Ratio (measured over the last 3 years) the fund has proved high risk adjusted returns compared to the category median.

 

Treynor

Sharpe

TATA India Consumer Fund

0.13

0.14

Category Median

0.06

0.06

Portfolio

Sector concentration: The fund’s concentration in the Top 3, Top 5, Top 10 sectors are equal compared to the category median.

 

Top 3

Top 5

Top 10

TATA India Consumer Fund

31.33

46.67

71.66

Category Median

33.53

46.67

71.66

Company concentration: The Fund’s Concentration in the Top 3, Top 5 and Top 10 Companies is lower than the category median.

 

Top 3

Top 5

Top 10

TATA India Consumer Fund

18.82

28.44

47.88

Category Median

19.65

29.23

50.53

Sector and Company Concentration signifies that the funds maintain a fairly diversified portfolio.

Number of Equity Holdings: The Fund currently holds 34 stocks in its portfolio (31st October 2017), which is lower than the median stock count of the thematic category, which currently stands at 38. In the last 5 years the equity holding averages to 27.

 

Cash Equivalent:        

Its cash equivalent for October was 4.56 per cent. The average cash allocation for the last two years (the fund was launched in 2016) is 6.96 per cent. Its maximum allocation to cash over the last two years is 14.10 percent in January 2016 and lowest was 3.73 percent in June 2017. In 2017 it had an average cash allocation of 5.78 per cent.

Portfolio Characteristics:

The Top 5 sectors include Retailing, TV Broadcasting & Software Production, Household & Personal Products, Consumer Food and Consumer Durables – Domestic Appliances.

In the last 6 months the fund has bought Ashok Leyland Ltd., Crompton Greaves Consumer Electricals Ltd., Dabur India Ltd., Eicher Motors Ltd., Escorts Ltd., Hero MotoCorp Ltd., Hindustan Unilever Ltd., MRF Ltd., Nestle India Ltd., Page Industries Ltd., Symphony Ltd., Tata Global Beverages Ltd., Tata Motors Ltd. and Whirlpool Of India Ltd.

Stocks of Century Plyboards (India) Ltd., Godrej Consumer Products Ltd., Greenply Industries Ltd., IFB Industries Ltd. and VST Industries Ltd. have been dropped from the portfolio. Stocks of Godrej Industries Ltd. Marico Ltd. and Mayur Uniquoters Ltd. have been bought and sold.

 

Process

The scheme seeks to achieve its investment objective by investing atleast 80% of its net assets in equity and equity related instruments of companies in Consumption Oriented Sectors. The scheme would also invest atleast 20 % of its net assets in debt and money market instruments.

The fund manager will follow the AMFI sector classification for deciding the investment universe for the scheme. The scheme may also invest some portion of the investible funds in debt and money market instruments.

The stocks under the Scheme will be selected after rigorous fundamental research which includes parameters like management competitiveness, business competitiveness, corporate governance, growth prospects, past track record etc.

Fund Manager

Sonam Udasi

Mr. Sonam Udasi is currently the fund manager of the TATA India Consumer Fund. Previously he was with IDBI Capital Market Services Ltd.Securities where he was the Head – Consumer Vertical, Reporting to Head Equities. He wa as the Head Research. He was also associated with the BRICS s also with Prime Securities as Head Research, reporting to President. Before that he was with JM Financial AMC as Senior Analyst Reporting to Chief Investment Officer.

Mr. Udasi manages the Tata Index Fund-Sensex & Nifty, Tata Banking & Financial Services Fund, Tata Digital India Fund, Tata India Consumer Fund, Tata India Pharma & Healthcare Fund, Tata Resources & Energy Fund and he also manages the equity portfolio of Tata Regular Savings Equity Fund, Tata Young Citizens Fund, Tata Dual Advantage Fund Scheme among others.  

Rupesh Patel

Mr. Rupesh Patel is a Fund Manager at Tata Asset Management Limited since June 2013. Mr. Patel joined the firm in May 2008 and served assignments in equity research and as Head of Portfolio Management Services vertical.

He also served as Principal Officer of PMS from January 2012 to June 2013 and was the Deputy General Manager of Investments from May 2008 to January 2012. Prior to joining the firm, Mr. Patel served as an Assistant Vice President of Investments at Indiareit Fund Advisors Pvt. Ltd. from August 2007 to April 2008. He was a Deputy General Manager at Credit Analysis & Research Ltd. until August 2007. Mr. Patel served as an Analyst and Manager at the Credit Analysis & Research. He had joined the Credit Analysis & Research in November 2001.

Mr. Patel has several years of experience spread across listed equity investments, private equity real estate investments, credit risk assessment and evaluation of infrastructure projects. He received a BE in Civil Engineering in 1997 and an MBA in Finance from Sardar Patel University, Gujarat in 1999.

Outlook

The consumer boom has managed to keep the growth rate of India among the highest in the world. With the average per capita GDP having crossed $ 1500 it is expected that consumption demand will now grow exponentially. The Government has also resolved to double the farm income by 2022. The Consumer theme therefore holds a lot of promise in the short, medium and long term. At the same time, being a thematic fund, this fund will not be able to take an exposure to all sectors especially those which are connected to say infrastructure. Hence, one should look at limiting the exposure to this fund. It is an attractive play on the changing picture of India.

 

 
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