Should You Invest in Tata Digital India Direct-Growth Fund?

Tata Digital India is an IT Sectoral fund that always grabs the attention of the thematic fund investors. Not only based on average returns, but Tata Digital India tops the IT sectoral funds based on risk-to-return ratios. So, let us explore more details about the Tata Digital India Fund.

About the Tata Digital India Direct-Growth Fund:

Tata Digital India (TDI) was Launched on 28th December 2015 and currently has an AUM of Rs.5,500 Crores. Compared to a few of the famous index funds in the market, whose expense ratio is around 0.20%, the TDI’s direct fund has a low expense ratio of 0.34%. However, the expense ratio of TDI’s regular fund is far higher at 2.08%. Mrs. Meeta (Thakker) Shetty CFA and Mr. Venkat Samala MBA (IIM Bangalore) manage the fund.

Asset Allocation of the Fund:

Currently, the fund has a total of 63 stocks, and the top 4 IT companies’ allocation is at 48.51% (Infosys (24.33%), TCS (10.21%), Tech Mahindra (7.31%), and HCL (6.6%)). TDI also has an international equity allocation at 5.50%

Risk-to-Return Ratios:

The fund’s 3-year and 5-year returns have successfully beat the benchmark returns with an alpha of 15.83 and 17.10, respectively.

Though there is higher volatility in the fund in the form of standard deviation, the volatility risk is justified by the fund’s Sharpe ratio of 1.17 for the last 3 – years.

The TDI can correlate with Nifty 50 (Benchmark) only up to 50.34%, as given below in the R-Squared function of the fund.

Who Should Invest in the fund?

If you are a sectoral investor with a strong belief in the growth of the IT theme as a whole and can hold on to the higher volatility and higher returns. In that case, you should invest in the IT sectoral funds. Out of the 5 IT sectoral funds available in the market. Tata Digital Fund Direct-Growth tops the chart in terms of risk-to-reward ratios.

You can invest in Tata Digital Fund by opening an account with ATS.

For support in creating an investment plan, please write to us at research@adityatrading.com

At ATS, we have tools to analyze and recommend funds to our clients based on different risk profiling techniques and performance measures of the portfolio.

To read more posts from ATS, check our blog at https://adityatrading.in/mutual-funds/