Should I Remain Invested in Tata Hybrid Equity Fund?

Among the many schemes that faced change after the re-categorization guidelines by SEBI surfaced, were four schemes of Tata Mutual Fund. These four got their name changed with effect from May 03rd, 2018. Among these, one scheme was Tata Balanced Fund which is now known as Tata Hybrid Equity Fund. In this article, you will get to read whether or not you should remain invested in it.

Tata Hybrid Equity Fund GrowthThis scheme was launched on October 08th, 1995 and its investment objective is to help investors earn capital appreciation and income for medium to long-term by investing mainly in equity and equity related instruments. This is an open-ended scheme which allows investors to buy or sell the units directly to the fund house itself.

How Are the Assets Allocated?This scheme aims to invest a minimum of 65% of the total assets in equity and equity-related instruments and a maximum of 80% with the risk involved being high. It may invest up to 20% to 35% in debt and money market instruments with the overall risk involvement being low to medium. The assets under management as on July 31st, 2018 were Rs.5238 crores.

Equity InvestmentsThe investment in equity is 74.09% while in debt is 25.32%. The top ten companies in whose equity this scheme has invested majorly are HDFC Bank (Financial), Reliance Industries (Energy), Tata Consultancy Services (Technology), State Bank of India (Financial), Maruti Suzuki India (Automobile), Larsen & Toubro (Construction), ITC (FMCG), ICICI Bank (Financial), Kotak Mahindra Bank (Financial), and United Spirits (FMCG).

Debt InvestmentsThe top ten companies in whose debt it has invested majorly are Shriram Transport Finance 2019 (Debenture), 7.72% GOI 2025 (Central Government Loan), 9.18% Vedanta 2021 (Debenture), ONGC Petro Additions 2021 (Debenture), HDFC 301-D 22/01/2019 (Commercial Paper), 8.55% Talwandi Sabo Power 2021 (Debenture), 8.5% HDFC 2020 (Debenture), 9.45% Idea Cellular 2019 (Debenture), 8.13% GOI 2022 (Central Government Loan), 8.65% Indiabulls Housing Finance 2019 (Debenture).

The asset allocation appears to be in accordance with the category requirement which seems to be good. The companies that have been selected under this scheme have been sorted out after conducting intensive research.

How Is Tata Hybrid Equity Fund Performing?This fund has outperformed both its benchmark VR Balanced TRI and category in five-year returns. It has yielded five year returns of 18.37% while the other two have yielded 15.73% and 17.93% as on August 24th, 2018. It has even beaten its competitor ICICI Prudential Equity and Debt Fund in terms of five-year returns.

Investment Details That You Should Know AboutNew investors may invest in Tata Hybrid Equity Fund Growth scheme with a minimum purchase amount of Rs. 5000. Existing investors may do so with a minimum additional purchase amount of Rs. 1000. Please note that no entry load will be charged from an investor who is investing in this scheme. Make sure that you do not redeem the units before completion of one year. In case you redeem them on or before completion of 365 days, then you will be liable to pay 1% as exit load.

ConclusionIn the current correction phase, it is seen that equity schemes are yielding good returns which is only anticipated to get better with time. This scheme which is a hybrid equity fund, will help you in availing the benefit of both capital growth along with income through debt and money market instruments. The asset allocation seems to be impressive and the performance is also quite well, therefore you may remain invested in Tata Hybrid Equity Fund. Make sure that it is in sync with your portfolio’s requirement. In case of any confusion, do not hesitate in consulting a financial advisor.

Dishika is well-versed with the ups and downs of the financial market and has published articles on mutual fund and SIP. She is associated with MySIPonline.com, which is an AMFI registered mutual fund company.