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Tata Absolute Return AIF

Scheme Rating

IME Scheme Rating

The Scheme does not meet our selection criteria at this time

Do not recommend for investments: We recommend waiting for the longer-term track to be established, especially around the long-short strategies’ ability to deliver the outperformance required to meet the targeted returns

IME Strategy Rating

Fairly Conservative Strategy: Tata Absolute return aims to deliver Liquid + 7.5% returns (~12-13% pre-tax returns) at 1/3rd of Nifty’s volatility. The portfolio is constructed like an equity savings fund – 65-70% in fixed income, with the balance 30% in equity (with an added layer of being able to hedge this portfolio and even go naked short). A substantial allocation to fixed-income securities makes it difficult for the 12-13% pre-tax target returns to be met. This requires substantial outperformance on the equity + hedge portfolio.

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

IME View on Tata Absolute Return AIF

Type: Absolute LS | Absolute Return LS | AUM ( cr) | Inc Date (12 Apr 2019)

Investment Philosophy

TATA Absolute Return Fund aims to provide the fund with consistent returns and liquidity. The strategy follows a blend of fundamental, quantitative, and macro strategies for identifying trading opportunities.

The strategy is large cap focused and attempts to produce additional returns while retaining a low degree of volatility. The portfolio allocation is built to reduce volatility and drawdowns through asset combinations – Equity, Fixed income, and a Hedge (derivatives) portfolio. 

Portfolio Construction

The portfolio is a combination of a fixed income portfolio with an equity long-short overlay.

FIXED INCOME PORTFOLIO (65-70% allocation)

  • Allocation: substantial part of the AUM in low risk fixed income instruments such as liquid mutual funds, government bonds, PSU & tax-free bonds, corporate bonds etc

EQUITY LONG-SHORT PORTFOLIO (-20% to 35% net equity allocation)

  • Long-Short Objective: aim to produce additional returns, while retaining low degree of volatility | will maintain a low net equity exposure | idea is to supplement fixed income returns by 5-10% p.a. 
  • Long Strategy (30-35%): large-cap focused 
  • Short Strategy (0-50%): via highly diversified stock derivatives (60-70 positions) | have the option to go net short in terms of net equity exposures

Trailing Performance

1yr 3yr 5yr Since Inception
Tata Absolute Return AIF

Performance as of: 30-Dec-99 | Inception Date: 12-Apr-19

Fund Managers

Harsh Agarwal | 3-star rated FM

Fund Manager | 22 yrs Experience | 6 yrs at current firm

Past Experience: Portfolio Manager (Reliance Securities), Principal Research Analyst (Vistasoft India)

Harsh Agarwal is a specialist in equity hedge fund strategies. He joined Tata Asset Management in November 2018 as Head of Alternative Strategies. Started the alternatives business with launch of Tata Absolute Return Fund in April 2019. Through Tata Absolute Return Fund, Harsh introduced the Equity market-neutral investing strategy to the investor community. His prior stint includes working as Portfolio Manager‚ Equity long/short strategy at Reliance Securities where he managed equity long/short portfolio and generated consistent high returns. Harsh received his training in equity investments and hedging strategies while working for Deutsche bank’s trading desk and Roc Capital Management USA. He is an MBA (Finance) from Symbiosis, Pune and also done courses in Certified Portfolio Manager and Certified Treasury Manager from The Institute of Chartered Financial Analysts of India University.

Fee Structure

Fee StructureFee
Fixed Fee Structure
Variable Fee Structures1.75% + 10% over 8% hurdle
Exit Fees6 months (1%)

AMC

AMC: Tata AMC PMS (click link for detailed AMC review)

Not a recommended AMC: Typically AMC driven PMS's benefit from the distribution & research strengths of the mutual fund. However, Tata MF has struggled to scale relative to the value of its brand and the PMS division is more an off-shoot than a strong independent arm. Until the PMS business is not more clearly defined and given a greater degree of focus, we do not recommend investments in Tata PMS.

Tata AMC PMS does not meet our criteria for PMS AMC Selection at this time. Understand our AMC rating criteria at AMC Rating Criteria or contact us via the LiveChat to learn more.