Tata Mutual Fund launches Tata Business Cycle Fund

Economic recovery is the talk of the town and there are investors who want to benefit from it. To tap this opportunity, Tata Mutual Fund has unveiled the new fund offer of Tata Business Cycle Fund. The new fund offer will close on July 30, 2021.

The scheme will invest in shares of companies that are expected to do well when the business cycle expands. During an expansion phase it will buy either the sector leaders or companies benefitting disproportionately from the sectoral tailwinds during economic & business cycles.

Compared to other diversified funds, this scheme will have greater sector concentration. The other portfolio parameters like portfolio churn, market cap allocation, number of stocks will be dependent on stage of the economic cycle. During a contraction phase it will invest in companies from sectors which provide cushion during downcycles.

Rahul Singh, CIO – Equities, Tata Asset Management and also the fund manager of the scheme said, “The focus has shifted to business cycles investing because business cycles have become shorter. Cycles which earlier lasted 4-5 years have now shortened to 1-2 years. And over the last few years, the impact of top-down sector allocations has been on alpha generation which has been very high.

This scheme will allocate atleast 80% of the portfolio to Business Cycles theme. “As the cycles have become shorter and a portfolio needs to adapt quickly to the changing environment, there is need to have “Tata Business Cycle Fund” in your portfolio,” Singh added.

The scheme will be benchmarked against Nifty500 TRI and minimum investment in new fund offer is pegged at Rs 5000.