Can Tata Digital India Fund Give Similar Performance in 2019 Like in 2018?

Tata Digital India Fund was launched on 28th Dec 2015. The investment objective of the scheme is to invest approximately 80% of assets in equity and equity-related instruments of Information sector companies to create long-term wealth. Currently, Mr Meeta Shetty and Mr Sailesh Jain are handling the portfolio and replaced Sonam Udasi in Nov 2018. Tata Digital India Fund Growth, with surprising 26% returns in the past one year, has become an attractive point for investors.

But, they have many queries as well, like whether it will produce a similar performance in 2019 as well like in 2018 or not. To make it transparent, here are answers to common queries regarding IT sector and this fund.

Is It Revival Phase for IT Funds?

It is not a revival phase of IT sector. Tata Digital India Fund G has become attractive due to the lower NAV. Since last 2 to 3-years, IT and Pharma sectors are facing the market downturn. Still, the top companies in the IT sector are showing up to 10% growth. In recent times, emerging companies in this sector may show growth due to base effect and lower management cost.

Did Abroad Challenges End for IT Sector?

No, they are still there. The challenges will remain at their place for some more time. The bigger companies can look at newer things to happen as moving the large employment base is not easy for them. The future growth of the companies is expected to be based on where they are leading and what are new spaces of digitalisation. With new technologies addition, the emerging companies will come forward.

How Rupee Boost IT Sector?

The rupee has affected IT sector slightly. The Indian technology-based companies have some clients in foreign as well, and with dollar appreciation and rupee depreciation, their income increases slightly. Further, the companies with strong core will be growing in future. Rupee will help to boost, but the major role in companies growth will be of the performance of them in the long-term. Some of the IT companies are showing positive upside due to rupee depreciation. But, we need to understand that our focus will be on companies performance and earning options rather than recent run-ups.

Are Domestic IT Companies in Portfolio Better Than Foreign Companies?

Tata Digital India Fund is focused on domestic IT sector companies only. The scheme has focused on flexible and relevant companies which can sustain the volatility. With the recent evolution in the IT sector, some of the companies are doing exceptionally well. But, identifying such companies is not easy, so the better approach of the fund is to identify the companies with strong core competencies. With the planned strategies and focused investment approach, we can say Tata Digital India Fund is a good option to invest with domestic IT companies.

Is It Right Time to Invest?

We have to understand that in the market, nothing stays forever. Tata Digital India Fund has competent fund managers, well-planned bottom-up approach, and well-qualified research team to assist the fund's performance and invest where it can to generate superior returns in the next couple of years. So, the investors who have high-risk appetite should definitely invest in Tata Digital India Fund as it is a good time to invest. Further, for the new and risk-averse investors, it can be a hard decision. They can invest in this scheme if they have a diversified portfolio to get risk-adjusted returns in a long-term and bear the market volatility. So, for regular investors, Tata Digital India Fund can be a better option with a diversified portfolio.

Hence, looking at different queries of investors and their answers, we can expect the Tata Digital India Fund to generate similar returns in a long-term and make the investors confident.