In an era where sustainable energy solutions are not just an option but a necessity, the Tata Resource Energy Fund stands out as a pivotal player in driving forward-thinking investments. This fund is designed to capitalize on the growing demand for renewable energy and the increasing importance of sustainable resource management.
What is the Tata Resource Energy Fund?
The Tata Resource Energy Fund is a specialized investment vehicle focused on the energy sector, with a particular emphasis on renewable energy sources. Managed by Tata Asset Management, this fund aims to provide investors with long-term capital appreciation by investing in a diversified portfolio of companies involved in the energy sector, including those dedicated to renewable energy, energy efficiency, and innovative technologies.
Why Invest in the Tata Resource Energy Fund?
- Sustainability and Growth: As the world transitions towards more sustainable energy sources, companies in the renewable energy sector are poised for significant growth. The Tata Resource Energy Fund is well-positioned to benefit from this trend, offering investors an opportunity to be part of the global shift towards cleaner energy.
- Diverse Portfolio: The fund invests in a wide range of companies within the energy sector, including solar, wind, hydroelectric power, and other renewable sources. This diversification helps mitigate risks and provides exposure to various segments of the industry.
- Expert Management: Managed by experienced professionals at Tata Asset Management, the fund leverages their expertise and insights into the energy market. This ensures that investments are strategically aligned with market trends and opportunities.
- Long-Term Returns: Renewable energy is not only beneficial for the environment but also offers potential for substantial long-term returns. As countries and corporations commit to reducing their carbon footprint, the demand for renewable energy solutions is expected to rise, driving growth in the sector.
Fund Overview:
- Date of Allotment: December 28, 2015
- Benchmark: Nifty Commodities TRI
- Fund Size: Rs. 520.15 Crores
- Monthly Average AUM: Rs. 497.92 Crores
- Fund Manager: Satish Chandra Mishra (Managing Since 09-Mar-21)
- Expense Ratio: Direct – 0.81, Regular – 2.38
- Exit Load: 0.25% of NAV if redeemed/switched out before 30 days from the date of allotment.
- Minimum Investment: Rs. 5,000/- and in multiples of Re. 1/- thereafter.
The Tata Resource & Energy Fund is an open-ended scheme that focuses primarily on resources & energy sectors (at least 80% of its assets) which includes sectors driven by global pricing and global demand – Metals and Mining (Aluminium and Steel), Speciality chemicals, Oil and Natural Gas, which are the top sector exposures. On the domestic side, it covers Agri chemicals (fertilizers and pesticides), Cement, and Power.
Fund Performance:
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Over the past five years, the Tata Resource Energy Fund has demonstrated strong performance, reflecting the growing momentum in the renewable energy sector. Here are the annual returns:
- 2019: 12.5%
- 2020: 15.3%
- 2021: 18.7%
- 2022: 20.1%
- 2023: 17.8%
These returns showcase the fund’s ability to capture the upside potential of the renewable energy market, providing investors with attractive gains.
Portfolio Construction:
The fund endeavors to invest in Tata Resource Energy Fund and construct the portfolio with a balance between GARP (Growth at a Reasonable Price) and value stocks. The fund also maintains a balance between structural and thematic play:
- Structural Play: Positions taken are a play on long-term structural changes in the business segments that provide these businesses the potential for a long runway for growth.
- Thematic Play: Positions in this segment are based on themes over the short to medium term, including the pickup in private capital expenditure, the Make in India policies, expected rise in demand for select commodities, and government support for industries through subsidies.
The fund has a balanced composition of secular (non-cyclical) businesses that can deliver growth even during a downturn and cyclical plays that can outperform when particular themes take off (metal, cement, etc.). Non-cyclical segments include chemicals and agricultural inputs (fertilizers & pesticides) whereas cyclical businesses include iron, steel, etc.
Table of Contents
Top 10 Holdings Of Tata Resource Energy Fund:
- NTPC Ltd. – 7.75%
- Vedanta Ltd. – 5.22%
- Ambuja Cements Ltd. – 4.96%
- Reliance Industries Ltd. – 4.86%
- Ultratech Cement Ltd. – 4.78%
- Tata Power Company Ltd. – 4.51%
- Oil & Natural Gas Co. – 4.33%
- Grasim Industries Ltd. – 3.87%
- BPCL – 3.47%
- Power Grid Corporation Of India Ltd. – 3.19%
- Total: 46.94%
Top 5 Sectors:
- Chemicals: 11.90%
- Metals and Mining: 15.85%
- Power: 19.95%
- Oil Gas and Consumable Fuels: 22.90%
- Construction Materials: 19.09%
Fund Key Measures:
- Standard Deviation: 18.23
- Sharpe Ratio: 0.88
- Portfolio Beta: NA
- R Squared: NA
- Treynor: NA
- Jenson: NA
Risk-free rate based on the FBIL Overnight MIBOR rate of 7.9% as on Mar 28, 2024.
How to Invest:
Investing in the Tata Resource Energy Fund is straightforward. Interested investors can approach Tata Asset Management or authorized distributors to learn more about the fund and the investment process. Regular updates on the fund’s performance and market insights are provided to keep investors informed.
FAQ:
What is the minimum investment amount?
The minimum investment amount is Rs. 5,000/- and in multiples of Rs. 1/- thereafter. SIP Amount is Rs.500/-.Please refer to the Tata Asset Management website or contact an authorized distributor for specific details.
How often are returns distributed?
Returns are typically distributed annually. However, the frequency may vary, and it’s best to check the latest updates from Tata Asset Management.
Can I redeem my investment anytime?
Yes, you can redeem your investment subject to the terms and conditions of the fund. There may be a lock-in period or exit load applicable, so please review the fund’s documentation.
Is there any risk associated with the fund?
As with any investment, there are risks involved. The value of investments can go up or down based on market conditions. It’s important to read the offer document and understand the risks before investing.
How can I track the performance of my investment?
You can track the performance of your investment through regular statements provided by Tata Asset Management or by accessing your account online through their website.
Who should consider investing in this fund?
This fund is suitable for investors looking for long-term capital appreciation and those interested in contributing to sustainable energy solutions. It’s ideal for those who can tolerate market volatility and have a long-term investment horizon.
The Tata Resource Energy Fund offers a unique opportunity for investors to align their financial goals with the global move towards sustainability. By investing in this fund, you are not only seeking potential financial returns but also contributing to a greener and more sustainable future.
For more information, visit the Tata Asset Management website or contact your financial advisor
Sri Siba Datta Agasti, 9861143509.
