The Hindu Business Line : Tata MF plans fund to invest in cos with outsourcing potential

The proposed Tata India Advantage Fund, which will have theBSE Sensex as its benchmark index, will mainly pick up companies that have developed significant outsourcing potential.

The scheme's major objective is to generate long term capital appreciation by selecting scrips that can provide superior returns on a sustained basis, the draft offer document filed with the SEBI has mentioned.

`Globally competitive Indian companies', according to Tata MF, are ones that have "superior skill set, lower cost of capital, long term access to cheaper raw materials, and inherent ability to unleash newer technological innovations at regular intervals vis-a-vis their global counterparts".

Such companies are able to deliver products and services which are "globally acceptable" and also fine-tune them ahead of the changing market dynamics.

A majority of these companies are said to have de-risked their business models, thanks to strong domestic franchises as well as substantial export revenues.

"India is strategically positioning itself as an emerging outsourcing destination for companies in the developed countries," the offer document has stated, adding that the country is attractive with regard to a variety of goods and services. These include textiles, pharmaceuticals, special steel, auto-ancillary, IT & ITES.

A minimum 70 per cent of the scheme's assets will be under normal circumstances invested in equity and equity-related instruments. There will be a maximum derivative position of 50 per cent of the net assets. Exposure to foreign assets will be restricted to 25 per cent of the net assets.

New liquid scheme

TATA Mutual Fund, which recently launched an equity fund dedicated to the infrastructure sector, has worked out a new liquid scheme, Tata Cash Plus Fund.

It will allow investors to choose from three options - daily dividend, weekly dividend and growth.

Dividend will be compulsorily reinvested, the offer document sent to SEBI for clearance has mentioned.

Tata MF already manages a few products that are typically aimed at short-term investors. These include Tata Liquid Fund and Tata Short Term Bond Fund.

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