Bengaluru, 19 March, 2025: Tata Asset Management today announced the launch of the Tata BSE Quality Index Fund, a factor-based index fund designed to provide investors with access to high-quality companies exhibiting strong financial health. The index selects 30 top companies based on criteria which indicate a company’s robustness, profitability, and operational efficiency and thus aims to provide a better investor experience. The fund has opened for subscription on March 17, 2025, and closes on March 28, 2025.
The Tata BSE Quality Index Fund aims to replicate the performance of the BSE Quality Index, which comprises companies selected based on quality parameters underlining high return on equity, low financial leverage, and low accrual ratio indicating quality of earnings.
The index fund seeks to provide long-term growth as the ‘Quality’ score of the stocks is determined by high RoE (Return on Equity), low financial leverage and stable accruals ratio (measures the part of earnings from non-cash items).
Anand Vardarajan, Chief Business Officer at Tata Asset Management, said, “We are excited to introduce the Tata BSE Quality Index Fund, which gives investors a unique opportunity to invest in high-quality companies.
As our third factor-based index fund, this launch reinforces our commitment to providing diverse investment options. The quality factor tends to perform better during weak economic phases compared to its broader universe, thus seeking to offer investors a necessary cushion during market downturns. By focusing on quality, we aim to provide a better investment experience and growth over long-term.”
Factor-based investing, also known as smart beta investing, involves targeting specific drivers of returns, such as quality, value, or momentum. The quality factor, in particular, has demonstrated resilience during periods of economic uncertainty, providing investors with a cushion against market downturns. By incorporating the quality factor into the investment strategy, the Tata BSE Quality Index Fund aims to deliver a more stable investment experience for its investors.
“In the current market environment, a quality-focused portfolio plays a crucial role in seeking to provide long-term growth backed by strong and consistent fundamentals,” added Mr. Vardarajan.
