How To Get The Most Out Of Tata Digital India Fund?

Some mutual fund schemes are good, some are great, and then comes Tata Digital India Fund (G). The performance which this scheme has shown has even surpassed the highest expectations an investor can have with a fund. So, today we are going to discuss the basic details of this scheme and will see that is it a right time to make an investment in it.

All About the Scheme

This is an equity-technology sector fund which was launched on Dec 28, 2015, as an open-ended scheme and with the objective to provide investors with high capital growth by investing majorly in stocks of IT companies of India. This scheme gained huge popularity when it gave an annual return of 49.90% (as on Aug 02, 2018) and topped its respective category. Now, the main reason behind the instant fame was that it was the newest scheme in its respective category and had the lowest AUM, and despite that, it gave an excellent performance. Now, let's have a look at the basic detail of the scheme.

As of now, Tata Digital India Fund NAV is Rs 14.64, and the assets under management as recorded on Jun 30, 2018, are worth Rs 197 crore. It invests its fund in a diversity of different market caps and currently has 60.32% investment in large-caps, 33.70% in mid-caps, and 5.98% in small-cap companies. This diversification helps the fund in providing stable returns even when a particular market-cap is not performing well. As for additional charges, an annual expense ratio of 2.82% (as on Jun 30, 2018) will be charged from your principal amount and you will have to pay an exit load of 0.25% if you redeem your investments before 90 days.

Why & How Should You Invest?

Well, the first reason you should invest in this fund is the current portfolio allocation. The top 5 holdings of the scheme include top-notch companies like Infosys, Tata Consultancy Services, Tech Mahindra, NIIT Technologies, and Tata Elxsi. All these stocks have shown great performance even during equity market volatility, which shows the quality of the holdings.

The second reason is the returns of 3.72%, and 4.73%, which it has given in the past 1 and 3 months. This show that this scheme has started showing recovery and in the coming time will give a great performance.

Now we come to the second question, “How to Invest?.” Well, the common mistake which many investors make with sector funds is that they put all their investment in a single fund, which is totally wrong. To get the full benefit of this scheme, you should diversify your funds. For e.g., if you want to start a monthly SIP of Rs 10,000, then invest Rs 4000 in a large-cap scheme, Rs 4000 in a multi-cap scheme, and the remaining Rs 2000 in Tata Digital India Fund. So, even if this scheme does not perform well, other funds will give stability to your investments.

Now, you know that what Tata Digital India Fund is and how you can get the most out of it. But before investment, do consult your financial advisor as the risk involved with this scheme is very high. If you have any investment-related query, then you can contact us at MySIPonline.