Saturday, October 31, 2009
TATA INDO-GLOBAL INFRASTRUCTURE FUND - STAY INVESTED FOR NOW
Tata Indo-Global Infrastructure Fund has had a disastarous start and has ince inception given a Negative Return of Minus 13%. It has trailed its Benchmark both over a 1year Period and since its launch.
The Tata Indo Global Infrastructure Fund is a three year close ended equity scheme which will be automatically converted to an open ended scheme upon maturity.
The Fund invests between 65%-85% in Domestic Companies and between 15%-35% in Foreign Securities.
To reassure investors of this Fund, The Tata Mutual Fund recently sent this Letter to all its investors : -
At the outset, we wish to thank you for investing in the Tata Indo Global infrastructure Fund. As you are aware, the investment objective of Tata Indo Global Infrastructure Fund is to generate long term capital appreciation by investing predominantly in equity and equity related instruments of companies engaged in infrastructure and infrastructure related sectors globally.
Stocks of infrastructure companies have underperformed significantly over the past few months due to a changing macroeconomic environment as well as the freeze on decisions on new projects due to the election code of conduct prior to the general elections. This led to some underperformance of the entire infrastructure sector. In the initial phase, Tata Indo Global Infrastructure Fund invested gradually in a rising market as it reached the peak. Hence the performance of the fund looks moderate.
One needs to judge the performance of this fund in light of one of the worst global economic meltdowns in recent history. India has been among the fortunate few countries which did not have to bear the full brunt of the meltdown. While leading economies of the world saw their economies shrink, the Indian economy merely witnessed a slow down.
Again in the economic recovery, the Indian economy would be among the first off the blocks. We have already started to see some of this play out. In this context if one were to study the performance of the Tata Indo Global Infrastructure Fund, it would get evident that the Indian portion of the scheme has outperformed the international portion.
It is getting evident from all the talks on �green shoots� that we are on the cusp of a global economic recovery as well. Therefore it is important for investors to wait as other global economies recover. As such the infrastructure sector holds tremendous potential not only in India but globally as well. Once global economies stabilize you would experience the benefits of diversification as well.
Thus the infrastructure story, and especially that of the Tata Indo-Global Infrastructure Fund (TIGIF), continues to look optimistic and one is advised to ride over the turbulent period by displaying patience and staying power.
Tata Mutual Fund.
SRIKANTH MATRUBAI'S COMMENT :
While Infrastructure story still continues to remain attractive., the timing of the Fund was what made the Fund such a disaster.
Being a Close Ended Fund, it is better to stay invested. Moreover, the Infra story looks to see 'greener' day ahead.
Stay invested for now and take a call when the Fund becomes Open-ended.
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