TATA EQUITY PE FUND

MUTUAL FUND:  Open Ended Diversified Equity Fund

Fund Objective:

To provide reasonable and regular income along with possible capital appreciation to its unit holder.

Investment Theme:
Investing 70% of the total assets in stocks having a trailing P/E ratio less than that of the BSE Sensex at the time of investment.

Others:

· Automatic Dividend Trigger Option : Fund will declare dividend automatically when NAV appreciate 5% (Option A) and 10% (Option B) (maximum one dividend per quarter).
· Fund has been performing very well in long term as compared to category (Equity Diversified) and benchmark. However, the short term performance is below average.
· The Fund Manager Mr Sachin Relekar has chosen traditional fund portfolio with main focus on Energy, Finance and Technology sectors. Hindalco, ONGC and Bharti Airtel from BSE Sensex are among top 15 stocks in the fund portfolio. His diverse portfolio won’t see much aggression with individual stock bets.
· The fund is sitting on a cash of almost Rs 70 Crore. As per fund manager, this is not cash call but gives them the flexibility to pick stocks in distress.
· Currently Portfolio PE 17.11 is undervalued and may go up with any upward movement in the market. Also, 13% approx net asset in form of cash & equivalent will provide opportunity in case of any correction in the market.


Recommendation:
The Investment theme of the fund, automatic dividend option and robust long term performance made this fund attractive. We may invest in this fund with long term investment horizon (more than 1 year) in mind.

FUND BRIEF:
FACE VALUE: Rs. 10
LAUNCH DATE: Jun, 2004
NET ASSETS: Rs 540 Crore (31/05/10)FUND PLAN & OPTION: Pan: Regular Plan. SIP available. Option: Growth and DividendMINIMUM AMOUNT: Regular: Rs 5,000. For SIP monthly: Rs 500 for 12 months.RISK/ REWARD: Grade: Average Risk with above average returns.

NAV DETAILS:       Growth Option                  Dividend Option
LATEST NAV:         Rs.44.46 (14/06/10)           Rs.39.40 (14/06/10)
52-Week High:       Rs.45.46 (18/01/10)           Rs.43.17 (15/01/10)
52-Week Low:       Rs.28.99 (13/07/09)           Rs.27.60 (13/07/09)

ASSETS ALLOCATION:

Type                                                      Standard Min-Max           Current Position
Equity and Related                                         70%-100%                       87%

(Fund PE Less Than Sensex PE, at investment) 
Equity and Related                                           0%-30%
Debt incl. Money Market etc                              0%-20%                          0%
Cash in Hand etc.                                                --                             13%

LOAD:Entry Load: NIL
Exit Load:      For Regular Plan: 1% below 1 Year                 For SIP: 1% below 2 Year

 BETA: 1.02
SHARPE RATIO: 0.41

BENCHMARK: BSE SENSEX
RECURRING EXPENSE (Charges): 2.5%P.A. Of Weekly Average Net Assets

FUND PERFORMANCE: Trailing Return as of 14.06.2010

Period                        Fund               Category                  Nifty                   Sensex
Year-to-Date              1.97 %              2.5 %                   -0.06 %              -0.73 %
1-Week                     1.64 %              2.61 %                   3.25 %                3.32 %
1-Month                    0.55 %              1.19 %                    2.05 %               2.02 %
3-Month                    2.83 %              2.96 %                   1.18 %                1 %
1 Year                     42.13 %            27.17 %                   13.4 %                13.78%
2 Year                     15.04 %            10.41 %                   7.27 %                 6.84 %
3 Year                     15.4 %               8.08 %                   7.62 %                 6.87 %
5 Year                     24.37 %            20.28 %                 19.73 %               20.37 %
Note: Return less than 1-year are absolute and over 1 year is annualized.

FUND PORTFOLIO DETALS:

Only 4 stocks are from NSE Nifty (top 50 companies). Portfolio consists of mainly Mid Cap stocks.
Ratios                                        Fund            Sensex          Nifty           Nifty Mid-Cap
Portfolio P/B Ratio:                3.47              3.30              3.70                 2.44
Portfolio P/E Ratio:               17.11            20.64            21.77                17.39

Top 10 Investments:

Polaris Software Lab                        4.60 %
Axis Bank                                       4.38 %
ONGC                                            4.26 %
Tata Chemicals                               3.44 %
Hindalco Inds.                                 3.21 %
Cadila Healthcare                             3.07 %
Balrampur Chini Mills                         2.77 %
Voltas                                           2.41 %
HPCL                                             2.31 %
Patni Computer Systems                   2.31 %



Sector Wise Asset Allocation:


Energy                                    16.9 %
Financial                                  12.4 %
Technology                              11.7 %
Services                                  7.3 %
Metals                                     6.4 %
Health Care                              6.3 %
FMCG                                      5.8 %
Diversified                                4.6 %
Automobile                               4.0 %
Engineering                              3.6 %
Chemicals                                3.4 %
Communication                         2.9 %
Construction                            1.7 %
Cash & Equivalent             12.9 %
Total                                     100.0 %