Tata AIA Life - Whole Life Mid Cap Equity Fund

The Tata AIA Whole Life Mid Cap Equity Fund is an open-ended equity fund that allocates most of its capital in equity and equity-related financial instruments. The fund house invests the money by properly analyzing the assets and the financial markets globally and locally.

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The Tata mid-cap equity fund can also invest a portion (0% to 35%) of its AUM (asset under management) in debt and money market instruments. It can also hold cash and cash equivalents if there is no investment opportunity in the current market conditions.

Tata Mid-Cap Equity Fund Facts

The Tata mid-cap equity fund was launched on 15/06/1994 and currently (as of 14/11/2021), it manages around ₹1460 Cr (AUM). Tata Asset Management which was incorporated in 1994, manages this fund. It has a track record of more than 25 years in the investment management business.

Investment Objective

The main objective of the Tata mid-cap equity fund is to provide the investors with a good return on their capital and also to provide income distribution. This fund focuses on the long-term and mid-term investment opportunities and allocates the investor's capital in growing mid-cap stocks. 

Investments made by the fund and fund managers are mainly focused on companies that can deliver great returns and have the potential to grow their business financially at a good rate. 

Asset allocation of the fund

Financial Instruments

Percentage of Allocation

Risk

Maximum

Minimum

Equity and Equity Related Instruments in the Mid-cap Segment

100%

65%

High Risk

Other Equity and Equity Related Instruments

35%

0%

High Risk

Debt and Money Market Instruments

also Cash / Cash Equivalents

35%

0%

Low to Medium Risk

Fund Summary

Here is the fund summary of the fund:

  • Expense Ratio – For the direct plan is 1.07% and regular plan is 2.46%

  • Exit Load – 1% (if redeemed before 365 days or switched out amount is more than 12% of the original investment cost)

  • AUM (Asset Under Management) (Fund Size) - ₹1,460 Cr

  • Lock-in - No Lock-in period

  • Age – Operational on 15/06/1994

  • Benchmark - Nifty Free Float Midcap 100 TRI

  • Minimum Investment – Minimum SIP (systematic investment plan) starts at ₹500 and Minimum Lumpsum investment starts at ₹5000

Fund Return Summary

Tenure

Percentage Return

1 Year

63.66%

3 Years

28.05%

5 Years

21.44%

Since Inception (2013) (Direct Plan)

21.36%

Since Inception (1994) (Regular Plan)

13.036%

*Returns are subject to change. The investment risk in the investment portfolio is borne by the policyholder.

Pros and Cons

Some of the benefits and downsides of the fund are:

Pros

Cons

Low expense ratio

High-Risk Profile

Low exit load

Not suitable for short-term or very short-term investors

Investments in mid-cap stocks - because this segment has higher potential to deliver a greater return as compared to large-cap (but the returns are not guaranteed). 

Liquidity risk

Strategically Diversified portfolio

Performance risk

This fund has the probability of generating a higher return than FDs, Debt and money market instruments.

Benefits of Tata Mid-Cap Equity Fund

The benefits of the Tata mid-cap equity fund are:

  • Mid-cap stocks: It allocates funds to the mid-cap segment. In the equity and equity-related space, mid-cap has a high probability of generating decent returns. For example, this fund has returned 21.36% since its inception (for Direct plan), which means the value today of a lumpsum investment of ₹10,000 in 2013 is ₹47,054.87, which makes it a 4.705487 X return in 8 years. A SIP of ₹1000 since its inception (for direct plan) would have produced a value today of Rs 233,259, which makes it a 2.4297 X return in 8 years.

  • Better Returns: This fund has a probability of generating higher returns as compared to conventional investment instruments such as Gold, FDs, Debt and money market instruments. This may also generate a higher return than large-cap funds. But this fund also has a higher risk profile. 

  • Long-term to mid-term time horizon: This fund is suitable for investors who have a long-term or a mid-term investment horizon. Since it is an equity investment, it has a chance of higher volatility risk in the short term. Over a long period, it can consistently generate good returns.

  • Track Record: Since 1994, this fund has delivered good returns, and the track record can help you understand the performance of the fund and the fund managers. Abhinav Sharma and Satish Chandra Mishra manage this fund. Abhinav Sharma has more than 15 years of experience in the asset management business, and Satish Chandra Mishra has more than 14 years of experience in the asset management business.

  • No lock-in period: The Tata mid-cap equity fund doesn't have any lock-in period, which means you can withdraw your money as per convenience.

  • Low exit load and expense ratio: This fund has a low exit load and expense ratio. A low exit load ensures that you don't have to pay a higher charge if you decide to exit the fund. Similarly, a low expense ratio ensures that you don't have to pay a higher charge for investing. These factors make an investment even more beneficial and affordable.

Holdings of the Fund

The top 10 holdings of Tata Mid-Cap equity fund are:

Holdings

% of Total Portfolio

Voltas Ltd

3.55%

Tata Power Co Ltd

3.54%

Mphasis Ltd

3.32%

Crompton Greaves Consumer Electricals Ltd

3.24%

Jindal Steel & Power Ltd

3.14%

Navin Fluorine International Ltd

2.7%

ICICI Bank Ltd

2.58%

Page Industries Ltd

2.58%

PI Industries Ltd

2.57%

ACC Ltd

2.56%

*The holdings in the portfolio mentioned above are according to Oct 31, 2021.

In Conclusion

To conclude, the Tata mid-cap equity fund is an open-ended and high-risk fund that focuses on investing and allocating its capital in equity or equity-related instruments from the mid-cap segment. This has delivered good and consistent returns since 1994 and Tata Asset Management manages it. However, you must always research before investing.

FAQ's

  • Q. What is the lock-in period of a mutual fund?

    A. The lock-in period of a mutual fund is a period/ time for which the investors cannot sell or redeem their units of that fund.
  • Q. What is an open-ended fund?

    A. An open-ended mutual fund is one in which you can sell or purchase the fund units at any time as there is no restriction on it. These transactions are carried out based on the daily Net Asset Values of the units as declared by the fund house.
  • Q. What is CAGR?

    A. CAGR is Compound Annual Growth Rate. As the name suggests, it indicates the fund's compounded growth rate measured annually over a period.
  • Q. What is the current allocation in terms of the market cap of the Tata mid-cap equity fund?

    A. Large Cap – 22.08%
    Mid Cap - 68.44%
    Small Cap - 7.9%
    Since it is a mid-cap fund, it has a higher exposure in the mid-cap segment.
  • Q. What is the expense ratio?

    A. The expense ratio of a mutual fund is the annual maintenance charge which the fund charges to the investors. This maintenance cost helps the fund to pay the fees of the fund managers, analysts, and other employees.
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