Tata BSE Quality Index Fund Files Draft with SEBI

Tata Mutual Fund has filed a draft for the Tata BSE Quality Index Fund with the Securities and Exchange Board of India (SEBI). The fund is an open-ended index fund designed to replicate or track the BSE Quality Total Return Index (TRI).

NFO Details

The New Fund Offer (NFO) details are as follows:

• Fund Category: Other Schemes – Index Fund
• NFO Period: Dates yet to be announced
• Benchmark: BSE Quality Total Return Index (TRI)
• Face Value: ₹10 per unit
• Entry Load: Not applicable
• Exit Load: 0.25% of NAV if redeemed within 15 days of allotment
• Liquidity: Open for repurchase/sale at NAV-based prices on all business days

Investment Strategy

As per the filing, the fund’s objective is to provide returns before expenses that match the performance of the BSE Quality TRI, subject to tracking error. It will invest in the same stocks as the index in the same proportion. The scheme does not guarantee or assure any returns.

The fund will track the BSE Quality TRI, and its tracking error is expected to stay below 2%. The total expense ratio (TER) will not exceed 1% of the daily net assets.

• Minimum Investment: ₹5,000 and in multiples of ₹1 thereafter
• Additional Investment: ₹1,000 and in multiples of ₹1 thereafter
• Minimum Redemption Amount: ₹500 or 50 units or balance, whichever is lower

Asset Allocation

• 95%–100% in securities covered by the BSE Quality Total Return Index
• 0%–5% in debt and money market instruments, including units of debt-oriented mutual funds

The fund may also invest in derivatives when index securities are unavailable or for rebalancing. 

Conclusion

Tata Mutual Fund, sponsored by Tata Sons Private Ltd and Tata Investment Corporation Ltd, will manage the scheme through Tata Asset Management Pvt. Ltd. The draft document also outlines taxation aspects, investor rights, and compliance with SEBI regulations.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.