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Tata Equity P/E Fund
 
Past Performance is no guarantee of future results.

Rating Methodology: Morningstar fund rating methodology is based on a fund's risk-adjusted return within a given Morningstar category. Morningstar rating is calculated every month for the 3 years, 5 years and 10 years period. Within each rating period, the top 10% funds receive a five star rating, the next 22.5% earn a four star rating, the next 35% get three stars, the next 22.5% receive two stars, and the last 10% get one star. Loads are not considered for the purpose rating. Five-stars indicate that a fund is in the top 10% percentile of its category in terms of its historical risk-adjusted return. In the Morningstar Small/Mid cap category, 120 fund classes, which completed 3 years of performance, were considered for rating. The current fund rating is for the 3 year period as of October 31, 2009. The rating is based on NAV provided by respective funds. Morningstar does not guarantee accuracy of the data.
Now available with
Automatic Dividend
Trigger Option
 
The hen that laid golden eggs would have continued to do so had patience and discipline been the guiding force. Likewise patience and discipline are invaluable in managing investments.

We have seen in the not too distant past, the BSE Sensex soaring to 21,000 points and then taking a deep dive all the way to 8000 points. Several investors were caught napping as most of their accumulated wealth was on paper and simply vanished before their eyes. The greed of expecting unidirectional capital appreciation that did them in has made investors realize that disciplined “profit booking” and patience should be an integral part of one's investment approach in order to enjoy the fruits of investment bit by bit.

We have all come to see that volatility is second nature to equity markets. Hence unless gains are booked at different times, all the virtual gains accrued can just disappear during the downward journey.

But, how is it possible to book profits when you have opted for a Dividend Option under a scheme, since the declaration of dividend is at the discretion of the Fund House?

To overcome this, Tata Mutual Fund now introduces “Dividend Trigger Option” under the existing dividend option of Tata Equity P/E Fund. The trigger options available are Option A (Trigger A) and Option B (Trigger B) for 5% and 10% appreciation respectively as explained below.
 
  • Under Dividend Trigger A, the Fund will initiate the declaration of dividend when there is an appreciation in NAV by 5% in a calendar quarter.

  • In case of Dividend Trigger B, the Fund will initiate the declaration of dividend when there is an appreciation in NAV by 10% in a calendar quarter.

This option endeavours to book profits when the markets move up so that you are not left with any regrets when the market moves southwards.

How does it work?
 
 
Please Note: The quantum of dividend shall be decided by the Trustees and will be subject to availability of distributable surplus.
 
A detailed illustration on how the Dividend Trigger Option will work:
 
The illustration stated below is for understanding purpose only and the actual NAV, dividend amount and dividend & ex-dividend dates may not be in line with the illustration.

The assumption is based on the NAV of Rs. 12 for illustratative purpose only. Actual allotment of units will be based on the prevailing NAV at the time of subscription.
 
 
Now let us analyze the different scenarios that could emerge:
Scenario 1 - NAV does not reach the trigger levels during the said quarter:
Dividend may not be declared.
Scenario 2 - NAV reaches the trigger level say on November 16, 2009:
 
  1. Record date for dividend will be announced within 5 working days from the date of occurrence of trigger say 23rd November, 2009.

  2. Dividend to the maximum of Re. 0.60/- per unit and Rs. 1.20/- per unit may be declared in Option A & B respectively.

  3. Ex-dividend date would be 24th November, 2009.

  4. Dividend in next quarter would be based on the previous exdividend NAV i.e. ex-dividend NAV of 24th November, 2009 as per above illustration.

Scenario 3 - NAV reaches the next trigger level in the same quarter say on December 15, 2009:
  1. No 2nd dividend will be declared in October - December 2009 quarter.

  2. However, if NAV level remains above the trigger level till 1st January, 2010 (i.e. on the beginning of the next calendar quarter), then the record date for dividend will be announced within the first five working days.

What are the advantages of the Dividend Trigger Option?
  • Dividend received will be Tax-free income in the hands of the investor.

  • Pre-determined targets of 5% and 10% appreciation in the NAV helps to book profits in a disciplined manner.

  • Possibility of Multiple dividend triggers would ensure repeated automatic profit booking by way of dividends at the pre-set trigger levels as chosen by the investor.

  • Pre-set dividend triggers serve as an effective hedging tool against the volatile nature of equity investments.
Sub - option available under Dividend Trigger A & B:
  • Dividend Payout, Or

  • Dividend Reinvestment, Or

  • Dividend Sweep to Tata Floater Fund – Growth Option
Default Option: Dividend Trigger Option B (10%) & Default Sub- option: Dividend Sweep to Tata Floater Fund – Growth Option

Important points to be noted:
  • This Option is effective from 1st October 2009.

  • For the calendar quarter October - December 2009, NAV as on September 30, 2009* would be the base NAV for trigger of 5% / 10% appreciation. For subsequent quarters the base NAV would be the NAV as on the last ex-dividend date or NAV as on 30th September 2009*, whichever is later.
    * or immediate previous business day if 30th September, 2009 is a nonbusiness day.

  • No dividend will be declared if the NAV does not reach the trigger level and irrespective of the appreciation level of the NAV, not more than one dividend will be declared in a particular calendar quarter. Further, it is also possible that the trigger level is reached only for Option A and not for Option B; in that case dividend will be declared only in option A.

  • Subject to the Regulations and disclosure requirements as specified by SEBI, the Trustees reserve the right to amend / modify any or all the features of the Dividend Trigger Option, including the minimum application amount, recurring expenses, load structure etc. from time to time.

  • The Dividend Trigger Option and sub-options there under are an integral part of Tata Equity P/E Fund.

  • Investors should choose the appropriate dividend trigger option and sub-option thereunder in the application form. Incase there is no indication as to the choice of Dividend Trigger Option (A - 5% or B - 10%) made by the unitholders then the investment by default will be in Dividend Option B – i.e. 10% trigger & Sub-option sweep to Tata Floater Fund - Growth Option.

  • Declaration of dividend is at the discretion of Trustees. As per the prevailing regulatory guidelines, dividend can be paid only out of distributable surplus. Pursuant to the payment of dividend, the NAV of the respective trigger option of the scheme would fall to the extent of payout and statutory levy (if applicable). Due to various reasons beyond the control of the Investment Manager, it may be possible that in spite of appreciation in NAV there is no distributable surplus available on the record date. Under such a scenario, no dividend will be distributed.

  • The redemption / switches request from Tata Floater Fund - Growth option can be made for a minimum of Rs. 1000/- / 100 units or in multiples of Rs.1/- thereafter or for all the Units.

  • Dividend Trigger option is also available under Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP).

  • All plans / options under the scheme shall have common portfolio.

  • The above provisions will remain in force till further notice.

  • All other terms and conditions of the Scheme Information Document read with other addendums if any remain unchanged till further notice.
 
Download Application Form   Download Scheme Information Document
Download Scheme Brochure   Transact Online
 
 
Disclaimer: Trigger facility in any manner whatsoever is not an assurance or guarantee on part of Tata Mutual Fund (TMF) / Tata Asset Management Limited (TAML) to the unit holders in terms of returns or capital appreciation or minimization of loss of capital or otherwise. TMF / TAML shall not be responsible if the trigger is not achieved and / or implemented due to reasons which are beyond the control of TMF / TAML such as technology failure / default etc. Further, this trigger facility shall be subject to terms and conditions as outlined in the application form of the scheme. Trigger facility being an additional facility can be withdrawn at any time at the discretion of Trustees. Nature and Investment objective: Tata Equity P/E Fund: An open ended equity scheme. The investment objective of the scheme will be to provide reasonable income and / or possible capital appreciation to its Unitholder. Tata Floater Fund: An open ended debt scheme. The investment objective of the scheme is to generate stable returns with a low interest rate risk strategy by creating a portfolio that is predominantly invested in good quality floating rate debt instruments, money market instruments and in fixed rate debt instruments which can also be swapped for floating rate returns. Load Structure: Tata Equity P/E Fund: Entry Load (including SIP): Nil. Exit Load (other than SIP): 1.00 % of the applicable NAV If redeemed on or before expiry of 365 days from the date of allotment. Exit Load (For SIP): 1.00 % of the applicable NAV If redeemed on or before expiry of 24 months from the date of allotment. Tata Floater Fund: Entry Load (including SIP): Nil. Exit Load (including SIP): Nil. Statutory Details: Constitution: Tata Mutual Fund has been set up as a trust under the Indian Trust Act, 1882. Sponsors & Settlors: Tata Sons Ltd., Tata Investment Corporation Ltd. Investment Manager: Tata Asset Management Ltd. Trustee: Tata Trustee Co. Pvt. Ltd. Risk Factors: Mutual Fund and securities investments are subject to market risks and there can be no assurance and no guarantee that the schemes will achieve their objectives. As with any investment in stocks, shares and securities the NAV of the units under the schemes can go up or down, depending upon the factors and forces affecting the capital market. Past performance of the previous Schemes, the Sponsors or its Group affiliates is not indicative of and do not guarantee the future performance of the Schemes. Tata Floater Fund - Investment in floating rate debt instrument is subject to Basis Risk and Spread Risk. In case of downward movement of interest rates floating rate debt instructions will give a lower return than fixed rate debt instruments. Tata Equity P/E Fund and Tata Floater Fund are only the names of the schemes and do not in any manner indicate either the quality of the Scheme, its future prospects or the returns. The sponsors are not responsible or liable for any loss resulting from the operations of the scheme beyond the initial contribution of Rs.1 lac made by them towards setting up the Mutual Fund. This is not a guaranteed return scheme. For scheme specific risk factors and other details please read the Scheme Information Document/Statement of Additional Information/Key Information Memorandum of the scheme carefully before investing.
 
 
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