Tata AMC launches BSE Quality Index Fund, offering factor-based investing

Fund tracks the BSE Quality Index, featuring firms with high RoE, low financial leverage, and low accrual ratio, ensuring strong earnings quality and financial stability

Tata Asset Management has launched the Tata BSE Quality Index Fund, a factor-based index fund aimed at offering investors exposure to high-quality companies with strong financial health. The fund tracks the BSE Quality Index and is designed to provide long-term growth and stability by selecting 30 top-performing companies based on key quality metrics. The subscription period for the fund begins on March 17, 2025, and will close on March 28, 2025.

 

The BSE Quality Index evaluates companies on parameters such as high Return on Equity (RoE), low financial leverage, and a stable accrual ratio — indicators that signify robust profitability and operational efficiency. By mirroring the performance of this index, the Tata BSE Quality Index Fund seeks to provide investors with a reliable investment avenue that can withstand market fluctuations.

 

 

Focus on stability and growth

 

Factor-based investing, often referred to as smart beta investing, strategically targets specific return drivers such as value, momentum, and quality. Among these, the quality factor has historically demonstrated resilience during economic downturns, making it a preferred choice for investors seeking stable returns.

 

Commenting on the launch, Anand Vardarajan, Chief Business Officer at Tata Asset Management, said, “We are excited to introduce the Tata BSE Quality Index Fund, which offers investors a unique opportunity to invest in high-quality companies. As our third factor-based index fund, this launch reinforces our commitment to providing diverse investment options.”

 

 “The quality factor tends to perform better during weak economic phases, providing investors with a necessary cushion against market downturns. By focusing on quality, we aim to enhance the investment experience and deliver long-term growth,” Vardarajan said.

 

Detail about Tata BSE Quality Index Fund

 

Objective of scheme: The investment objective of the scheme is to provide returns, before expenses, that commensurate with the performance of BSE Quality Total Return 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.

 

Scheme type: Open-ended

 

Scheme category: Other scheme - Index funds

 

Exit Load: 0.25 per cent of the applicable NAV, if redeemed on or before 15 days from the date of allotment. 

 

Minimum subscription amount: Rs 5,000 and in multiple of Re 1 thereafter.

 

The fund will be managed by Kapil Menon and Rakesh Prajapati.

 

Who should invest?

 

This investment is ideal for individuals seeking:

 

Long-term capital growth.

 

Returns aligned with the total performance of securities represented by the BSE Quality Total Return Index, subject to tracking error.

 

Note: Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.