Top MFs: Tata Midcap Fund

Objective

Tata Midcap Growth Fund is an open-ended mid Cap Equity scheme which belongs to Tata Mutual Fund House. The investment objective of the fund is to provide income distribution and / or medium to long term capital gains by investing in mid cap stocks.

Fund Highlights

The fund was launched on Jul 01, 1994.

The Tata Midcap Growth Fund currently holds Assets under Management worth of Rs 1460.13 crore as on Oct 31, 2021.

The expense ratio of the fund is 2.28%

Exit Load for units more than 12% of the investments, an exit load of 1% if redeemed within 365 days

Minimum investment required is Rs 5000 and minimum additional investment is Rs 1000. Minimum SIP investment is Rs 150.

Returns

Tata Midcap Fund returns of last 1-year are 36.56%. Since launch, it has delivered 20.48% average annual returns. The fund has doubled the money invested in it every 2 yrs. Its trailing returns over different time periods are: 42.42% (1yr), 23.43% (3yr), 18.11% (5yr) and 12.76% (since launch). Whereas, Category returns for the same time duration are: 47.69% (1yr), 22.14% (3yr) and 16.8% (5yr).

Investment Strategy

While the top 10 equity holdings constitute around 29.78% of the assets, the top 3 sectors constitute around 40.11% of the assets.

The fund largely follows a Growth oriented style of investing and invests across market capitalisations - around 22.43% in giant & large cap companies, 69.54% in mid cap and 8.03% in small cap companies.

Sector and Stock wise holding

The fund has the majority of its money invested in Financial, Chemicals, Construction, Technology, Healthcare sectors. It has taken less exposure in Financial, Chemicals sectors compared to other funds in the category.

The fund's top 5 holdings are in Voltas Ltd., Navin Fluorine International Ltd., Crompton Greaves Consumer Electricals Ltd., Jindal Steel & Power Ltd., PI Industries Ltd.

Tax Implications

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax - STCG) if units are redeemed within 1 year of investment.

2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax - LTCG).

4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.

5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

Fund Manager

The Tata Midcap Growth Fund - Regular Plan is managed by Satish Chandra Mishra (Since Mar 09, 2021) and Abhinav Sharma (Since Mar 09, 2021).

Expert Comment

The scheme's ability to deliver returns consistently is in-line with most funds of its category. Its ability to control losses in a falling market is average. Investors who are looking to invest money for at least 3-4 years and looking for high returns. At the same time, these investors should also be ready for possibility of moderate losses in their investments.