SEBI's recategorization has affected a lot of schemes in different ways. Many of the schemes have faced either a merger or a name change and some of the schemes have faced both. Tata Hybrid Equity Fund is also one of the schemes that have been affected by this step and in this post, we are going to see that how.
What Has Changed?
The first and foremost thing that has changed in this scheme is its name. It was previously known as Tata Balanced Regular Fund which post recategorization has been changed to Tata Hybrid Equity Fund-Regular Plan. The name change is done to portray the investment style of the scheme, which is an equity-oriented investment.
The second thing that has changed is the category that this scheme falls in its category. Previously the fund was under the balanced equity category which means that it has to make 60% investments in equities and the rest 40% in debt instruments, but after the recategorization the scheme has been allotted the hybrid aggressive category, under which it can now make up to 75% investment in equities, which means that the chances of capital growth will be high, but so will be the risk. As of now, it has 77.70% of its total investments in equity securities and 22.30% in debt and cash instruments.
The third and last thing that has changed in this scheme is the investment style which it follows. Previously Tata Hybrid Equity Fund used to follow a conservative style of investing, which means investing in stocks at lower levels and waiting until it blooms and give high returns. But now, the scheme is following an aggressive style of investing, which means that stock picking will be more frequent and the portfolio will face changes according to the behavior of the market. This style though is a bit risky but will surely increase the returns provided by the scheme.
Now, let's have a look at the basic parameters of the scheme which will help you to plan your investment in this scheme.
As on Jul 26, 2018, Tata Hybrid Equity Fund NAV is Rs 207.12 and the assets size as recorded on Jun 30, 2018, is Rs 5,613. It has an expense ratio of 2.12%, and you will have to pay an exit load of 1% if you redeem your investments before 365 days. The scheme has given returns of 16.71%, and 14.34%, in past 5 and 10 years, respectively (as on Jul 26, 2018) and has successfully beaten its benchmark at both the instances. The minimum investment amount required to add this scheme to your portfolio is Rs 5000 and you can start a SIP with MySIPonline for as low as Rs 500.
Why Should You Invest?
Tata Hybrid Equity Fund currently has around 24.79% of the total equity investment in the finance sector, and the top holdings from finance include companies like HDFC Bank, State Bank of India, Federal Bank. Now, these stocks are already showing a great recovery and are on their way to reach their intrinsic value and when that happens the scheme is going to give great returns.
So, this covers all the things that have changed in Tata Hybrid Equity Fund post recategorization. The changes may not seem big but will surely have an effect in long-term. So, stay invested and see the magic. If you have any queries about the recategorization then you can contact our experts at MySIPonline.