India’s economy has been shaped by some of its largest business groups, operating across various industries. These groups have a presence in many aspects of life, from everyday essentials like salt to advanced technologies like satellites. Over the years, they have adapted to changing times and contributed to multiple sectors. Companies that belong to these business houses offer a potential for long-term capital appreciation opportunity to investors. They have a head-start in sectors they position themselves due to the strong support from parent groups.
These are broad-based index mutual fund schemes designed to help you choose the right long-term investment options and invest in the progress of companies within relatively stable industry groups. Tata BSE Select Business Groups Index Fund could be a strategic choice that aims to provide you access to India's important business group companies. In this blog, we will explore the factors that could make this fund a distinctive and potentially attractive investment.
This scheme aims to offer an opportunity to invest in companies from these business groups through a single, diversified portfolio. Let’s explore why this fund could be worth considering.
What constitutes the Tata BSE Select Business Groups Index Fund?
Tata BSE Select Business Groups Index Fund is an open-ended scheme replicating / tracking BSE Select Business Groups Index (TRI). This index concentrates on firms belonging to India's seven leading Business Groups like: Tata, Reliance, L&T, Mahindra, Adani, Aditya Birla, and Jindal.
*This is not an indicative list & can vary based on free-float market capitalization.
The Investment Proposal
A diverse portfolio through Tata BSE Select Business Groups Index Fund. It distinguishes from others by:
Giving Access to Market Leaders:
The fund aims to replicate the performance of the BSE Select Business Groups Index, featuring India's largest seven business groups across sectors like oil and gas, IT, construction, automotive etc. It offers a chance to benefit from the potential stability and market leadership of established stocks in their portfolio.
Diversification Across Sectors:
Since Business Groups operate in various industries, the fund reduces the risk associated with any single sector, offering a strategy that handles market volatility and provides growth opportunities.
Growth Supported by Resilience:
This fund includes seven large business groups which manage themselves better in tough conditions. Their flexible methods and adaptability contribute to their resilience, even in unstable markets, making this fund a good option for long-term diversification.
Fund Key Features
Index-Based Investment:
The Fund is a passively managed Index fund which will employ an investment approach designed to replicate / track the performance of the BSE Select Business Groups Index (TRI). The Scheme seeks to achieve this goal by investing in securities constituting the Index in same proportion as in the Index. The Scheme will invest at least 95% of its total assets in the securities comprising the Underlying Index. The Scheme may also invest in debt / money market instruments including units of Mutual Funds to meet the liquidity and expense requirements.
Group Capping for Equitable Exposure:
To ensure balance, the fund limits each business group's allocation to 23%. This helps prevent any single group from dominating the portfolio, offering a more diversified exposure.
Regular Reconstitution and Rebalancing:
The index undergoes semi-annual reconstitution and quarterly rebalancing, which maintains the portfolio's alignment with market trends and the changing economic environment.
Why Choose the Tata BSE Select Business Groups Index Fund?
- Longevity: Most business groups demonstrate resilience across economic cycles. By investing in India's largest and relatively stable enterprises, your portfolio can aim to participate in potential growth.
- Solidity: Business groups play a key role in India's economy by leading infrastructure projects, technological innovations, and green energy efforts, giving you exposure to sectors driving economic growth.
- Leadership: Companies within large business groups have access to group resources, enabling them to achieve leadership positions in their sectors. They might innovate, explore market opportunities and take measured actions during crises.
Who Should You Invest?
The fund is designed for investors interested in a passively managed portfolio composed of companies included in the BSE Select Business Groups Index. With a focus on established firms and industry diversification, it provides an option for investors looking to balance risk mitigation with growth potential.
The Tata BSE Select Business Groups Index Fund presents a unique opportunity to invest in India's seven largest business conglomerates through a single investment vehicle. It offers potential diversification, stability, and strives to participate in India's economic growth story. Whether you are an experienced investor or a newcomer embarking on your investment journey, this fund could serve as a strategic addition to your portfolio.
Scheme Details
Scheme Name | Tata BSE Select Business Groups Index Fund |
Investment Objective | The investment objective of the scheme is to provide returns, before expenses, that commensurate with the performance of BSE Select Business Groups Index (TRI), subject to tracking error. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns. |
Type of Scheme | An open-ended scheme replicating / tracking BSE Select Business Groups Index (TRI). |
Benchmark | BSE Select Business Groups Index (TRI). |
Min. Investment amount | Rs 5,000/- and in multiple of Re.1/- thereafter. |
This product is suitable for investors who are seeking*:
| Scheme Risk-O-Meter | Benchmark Risk-O-Meter | |
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| *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. | ||
(The above product labelling assigned during NFO is based on internal assessment of the scheme characteristics and the same may vary post NFO when the actual investments are made. The same shall be updated as per provision no. 17.4.1.i of SEBI Master Circular on Mutual Fund dated June 27, 2024, on Product labelling in mutual fund schemes on ongoing basis.)
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
