Tata Ethical Fund: A Shariah-Compliant Investment Analysis
This fund aims for medium to long-term capital gains by investing in a portfolio of Shariah-compliant equity instruments from well-researched companies.
Fund Overview
- Fund Manager: Abhinav Sharma (since Sep 2021)
- Inception Date: Re-opened on 05 Aug 1996
- AUM (Avg): ₹1,623.78 cr
- Benchmark: Nifty 500 Shariah TRI
- Minimum Investment: ₹5,000 (SIP from ₹100)
- Also Read: SBI Magnum Children’s Benefit Fund – NAV, Returns, Plan
Portfolio, Expenses & Loads
Asset Allocation (Shariah Compliant)
- Equity Instruments: 80% - 100%
- Other Instruments (incl. Cash): 0% - 20%
Expense Ratio & Loads
- Direct Plan Expense: 0.60% (FY 2024–25)
- Regular Plan Expense: 1.85% (FY 2024–25)
- Entry Load: Nil
- Exit Load: 0.50% if redeemed within 90 days
Performance Analysis
Fund Performance (as on 31 Mar 2025)
This table shows the compounded annual growth rate (CAGR) for different periods.
| Period | Direct Growth | Regular Growth | Benchmark |
|---|---|---|---|
| 1 Year | 3.56% | 2.28% | 3.15% |
| 3 Years (CAGR) | 9.95% | 8.59% | 9.55% |
| 5 Years (CAGR) | 23.41% | 21.93% | 23.76% |
| Since Inception | 15.14% | 15.85% | 15.54% |
Calculated Returns (Direct Plan - Growth)
These returns are calculated using specific NAVs from the historical data, ending on 18-Jun-2025.
- Latest NAV: ₹433.8542 (as of 18-Jun-2025)
- 1-Year CAGR: –2.77% (vs. ₹446.1966 on 19-Jun-2024)
- 3-Year CAGR: +17.38% (vs. ₹268.2570 on 17-Jun-2022)
- 5-Year CAGR: +21.70% (vs. ₹162.5085 on 22-Jun-2020)
Historical NAV Chart (Direct Plan - Growth)
This chart visualizes the complete NAV history of the Tata Ethical Fund's Direct-Growth plan from June 2020 to June 2025, based on the provided data.
Key Insights for Investors
Consistent Long-Term Performance
The fund has closely matched its benchmark (Nifty 500 Shariah TRI) since inception, demonstrating its ability to generate wealth while adhering to Shariah principles. The strong long-term SIP returns further validate its performance.
High-Quality Large-Cap Focus
The portfolio is heavily concentrated in large-cap market leaders like TCS, Infosys, and HUL. This approach typically reduces volatility compared to mid or small-cap funds, making it suitable for moderately risk-averse investors.
Competitive Expense Ratio
The Direct Plan expense ratio of 0.60% is competitive for an actively managed thematic fund. This lower cost structure allows investors to retain a larger portion of the generated returns over the long term.
Risk & Volatility Management
With a Sharpe Ratio of 1.19 (close to the benchmark's 1.35), the fund shows efficient risk-adjusted returns. Its low equity turnover (10.32%) suggests a stable, buy-and-hold strategy, which is beneficial for minimizing transaction costs and managing capital gains tax.
Investment Portfolio Dashboard
Comprehensive overview of fund allocation, risk assessment, and performance metrics for Tata Ethical Fund
Sector Allocation
| Sector | Percentage |
|---|---|
| Information Technology | 28.32% |
| Capital Goods | 16.31% |
| Fast Moving Consumer Goods | 10.95% |
| Consumer Durables | 8.55% |
| Healthcare | 8.01% |
| Automobile And Auto Components | 7.71% |
| Chemicals | 6.45% |
| Construction Materials | 4.92% |
| Textiles | 1.91% |
| Oil Gas And Consumable Fuels | 1.15% |
| Consumer Services | 1.14% |
| Diversified | 0.98% |
| Metals And Mining | 0.78% |
Market Capitalization Wise Exposure
| Category | Percentage |
|---|---|
| Large Cap | 57.23% |
| Mid Cap | 33.42% |
| Small Cap | 9.35% |
Market Capitalisation is as per list provided by AMFI.
Fund Risk Assessment
Investors understand that their principal will be at Very High Risk.
Benchmark Riskometer
Benchmark Riskometer is at Very High Risk.
| Company | % of NAV |
|---|---|
| TCS | 7.18% |
| Infosys | 6.60% |
| HUL | 5.07% |
| HCL Tech | 4.13% |
| Siemens | 3.00% |
| Cummins | 2.76% |
| Ambuja Cements | 2.74% |
| Carborundum | 2.67% |
| Tech M | 2.57% |
| PI Industries | 2.28% |
SIP Returns (₹10,000/month)
| Horizon | Fund Value | CAGR | Benchmark TRI Value | Benchmark CAGR |
|---|---|---|---|---|
| 1 Year | ₹1,28,753 | 13.87% | ₹1,24,175 | 6.55% |
| 3 Years | ₹4,51,622 | 15.32% | ₹4,30,179 | 11.94% |
| 5 Years | ₹9,08,441 | 16.62% | ₹8,84,552 | 15.54% |
| 7 Years | ₹14,05,668 | 14.46% | ₹14,01,596 | 14.38% |
| 10 Years | ₹24,26,900 | 13.50% | ₹25,53,513 | 14.45% |
| Since Inception | ₹5,41,33,046 | 17.38% | ₹2,09,54,683 | 14.23% |
Peer Comparison
| Fund | 1-Yr Return | 3-Yr Return | 5-Yr Return | Expense Ratio | Sharpe Ratio |
|---|---|---|---|---|---|
| Tata Ethical Fund Direct – Growth | 3.56% | 9.95% | 23.41% | 0.60% | 1.19 |
| Aditya Birla Sun Life ESG Integration Strategy | 12.86% | 18.37% | – | 1.44% | 0.48 |
| Quantum ESG Best-in-Class Strategy | 9.72% | 17.42% | 23.48% | 0.75% | 0.53 |
| SBI ESG Exclusionary Strategy | 7.29% | 17.92% | 23.72% | 1.34% | 0.59 |
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