Tata AIA Life Insurance Launches Small Cap Discovery Fund

~ Policyholders to benefit from long-term capital appreciation through small cap stocks ~

MUMBAI, India, July 13, 2023 /PRNewswire/ — Tata AIA Life Insurance (Tata AIA), one of India’s leading life insurers, has launched its first dedicated Small-Cap fund, Tata AIA Small Cap Discovery Fund. The New Fund will offer policyholders the opportunity to generate capital appreciation in the long-term by investing in small-cap market capitalisation stocks. The New Fund Offering (NFO) window will remain open from July 10 to July 24, 2023, at Rs. 10 per unit, applicable only during the NFO period.

Commenting on the launch of the Small-Cap Discovery Fund, Mr. Harshad Patil, Executive Vice President and Chief Investment Officer (CIO) of Tata AIA Life Insurance, said, “The Government is focused on formalising the economy during the Amrit Kaal, which will benefit small businesses immensely. Further, growth in consumption demand, rising disposable income, and support for manufacturing will catalyse several smaller companies to become dominant in their sectors. Given these forces, the Tata AIA Small-Cap Discovery Fund offers our policyholders a great opportunity to maximise their investment by spotting such opportunities early and investing in them over the medium to long term.”

Small-cap stocks are a significant part of the Indian equity market, with more than 4500 companies. Among these, approximately 500 stocks have a market cap higher than Rs.2000 crore. That is why, compared to the large-cap and mid-cap categories, the small-cap category presents a large universe of stocks for investment. However, many of them are also prone to a high degree of volatility as their performance can be impacted by changing market dynamics. Therefore, one needs to have a longer investment horizon to enjoy the returns from this fund.

Small cap stocks offer several advantages to investors:

     1.  Nifty Small Cap 100 trades at a deeper discount on 2-year average PE** (14.7) as compared to Nifty 50 (22.08)- stocks available at lower prices.

     2.  Nifty Small cap index has given excellent returns over 1 year (14.3%), 3 years (41%), and since inception (13.6%)

     3.  Tata AIA funds have beaten their benchmarks over multiple time periods. The below table illustrates the returns over 5 years

     

     4.  RBI rate hike cycle has paused, and Inflation is cooling – favourable for small caps by making the availability of funds at cheaper rates.

Tata AIA Small Cap Discovery Fund will primarily invest (up to 65%) in handpicked small-cap companies offering opportunities for long-term wealth creation. The fund provides investors with an opportunity to invest in quality businesses that are small but have the potential to grow into mid and large-cap companies.

Tata AIA policyholders can invest in this fund through the Company’s ULIP offerings, Fortune Pro, Wealth Pro, Fortune Maxima, Wealth Maxima, i Systematic Insurance Plan and Smart Sampoorna Raksha Plus. In addition, this Fund will also be attached to Tata AIA’s Param Rakshak Solutions. This offers consumers the unique opportunity to benefit from the long-term growth potential of equity while securing their loved ones with the protection of a life insurance cover.

Tata AIA has a well-defined research process and methodology and takes a long-term view based on fundamental research. As on 31^st May 2023, the Company’s total Asset Under Management (AUM) grew by 30% – increasing to INR 75,192 Cr from INR 57,927 Cr.                                           

99.10% of the rated AUM of Tata AIA Life is rated either 4 star or 5 star on a 5-year basis as of March 31st, 2023, by Morningstar Ratings*. Out of the 11 funds available for new business, 7 are rated 5 star, and 4 are rated 4 star as of March 31st, 2023, on a 5-year basis.7 funds rated 5 star are Whole Life Aggressive Fund, India Consumption Fund, Multicap Fund, Whole Life Stable Fund, Large Cap Equity Fund, Whole Life Income Fund and Top 200 Fund. 4 funds rated 4 star are Top 50 Fund, Whole Life Short Term Fixed Income Fund, Whole Life Midcap Fund and Super Select Equity Fund.

* ©2020 Morningstar. All rights reserved. The Morningstar name is a registered trademark of Morningstar, Inc. in India and other jurisdictions. The information contained here: (1) includes the proprietary information of Morningstar, Inc. and its affiliates, including, without limitation, Morningstar India Private Limited (“Morningstar”); (2) may not be copied, redistributed or used by any means, in whole or in part, without the prior, written consent of Morningstar; (3) is not warranted to be complete, accurate or timely; and (4) may be drawn from the data published on various dates and procured from various sources and (4) shall not be construed as a n offer to buy or sell any security or other investment vehicle. Neither Morningstar, Inc. nor any of its affiliates (including, without limitation, Morningstar) nor any of their officers, directors, employees, associates or agents shall be responsible or liable for any traducing decisions, damages or other losses resulting directly or indirectly from the information.

**Source: Bloomberg Kotak Institutional Equities

About Tata AIA Life

Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture company, formed by Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA). Tata AIA Life combines Tata’s pre-eminent leadership position in India and AIA’s presence as the largest, independent listed pan-Asian life insurance group in the world spanning 18 markets in the Asia Pacific region.

About the Tata Group 

Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise, headquartered in India, comprising 30 companies across ten verticals.

The group operates in more than 100 countries across six continents, with a mission ‘To improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust’.

Tata Sons is the principal investment holding company and promoter of Tata companies. Sixty-six percent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation and art and culture.

In 2021-22, the revenue of Tata companies, taken together, was $128 billion (INR 9.6 trillion). These companies collectively employ over 935,000 people.

Each Tata company or enterprise operates independently under the guidance and supervision of its own board of directors. There are 29 publicly-listed Tata enterprises with a combined market capitalisation of $311 billion (INR 23.6 trillion) as on March 31, 2022.

Companies include Tata Consultancy Services, Tata Motors Tata Steel, Tata Chemicals, Tata Consumer Products, Titan, Tata Capital, Tata Power, Indian Hotels, Tata Communications, Tata Digital, and Tata Electronics.

About AIA

AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets – wholly-owned branches and subsidiaries in Mainland China, Hong Kong SAR, Thailand, Singapore, Malaysia, Australia, Cambodia, Indonesia, Myanmar, New Zealand, the Philippines, South Korea, Sri Lanka, Taiwan (China), Vietnam, Brunei and Macau SAR, and a 49 per cent joint venture in India.

The business that is now AIA was first established in Shanghai more than a century ago in 1919. It is a market leader in Asia (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$302 billion as of 30 June 2022.

AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia, AIA serves the holders of more than 40 million individual policies and over 17 million participating members of group insurance schemes.

 AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code “1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: “AAGIY”).

 

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