Tata Ethical Fund
Direct · GrowthAI Summary
Tata Ethical Fund has delivered strong long-term lump-sum returns, with a 12Y CAGR of 12.09% versus 9.79% for the NIFTY 50 and positive alpha of 3.19% over that period. However, its SIP XIRR lags the category across all horizons — for example, 5Y XIRR of 16.5% versus the category average of 16.95%, and 1Y XIRR of 7.43% versus 14.1%. Recent performance has been weak, with calendar year returns of -5.27% in 2026 and -0.49% in 2025.
The fund exhibits low beta (0.70-0.83 across periods) and consistently lower downside capture (67.61% to 82.34%) than upside capture, indicating a defensive profile that cushions market falls. Calmar ratios of roughly 0.49-0.55 across horizons reflect steady risk-adjusted returns relative to drawdowns. The maximum drawdown of -0.29% with a 39-day duration and 147-day recovery suggests shallow, quickly recovering corrections, though 6 drawdown events exceeding 10% have occurred historically.
The portfolio is diversified across 56 holdings, with IT - Software as the dominant sector at 22.8%, led by Infosys (6.74%), TCS (5.14%), and Tech Mahindra (3.39%). Pharmaceuticals & Biotechnology (12.2%) and Auto Components (7.8%) provide secondary exposure, while FMCG, capital goods, chemicals, healthcare, and metals round out the mix. The top 10 holdings account for roughly 34.6% of NAV, indicating moderate concentration at the stock level.
Against category peers, the fund trails on SIP XIRR at every horizon — 3Y XIRR of 14.52% versus 16.82% for the category and 10Y XIRR of 15.18% versus 16.71%. Long-term consistency versus the benchmark is a strength, with positive alpha over 5Y (0.43%), 7Y (4.84%), 10Y (2.11%), 12Y (3.19%), and 15Y (3.57%) periods. The fund's outperformance versus the NIFTY 50 has been most pronounced over 7Y and longer windows, suggesting patience is rewarded.
This fund suits investors seeking Shariah-compliant or ethically screened equity exposure with a long-term horizon of 7 years or more, where its alpha versus the benchmark has been strongest. Its low beta and subdued downside capture make it appropriate for moderate risk tolerance investors who prioritize capital protection in downturns over maximum upside participation. Investors should be comfortable with sector concentration in IT and recent underperformance versus category peers.
- Consistent long-term alpha versus the NIFTY 50, including 4.84% alpha over 7Y and 3.57% over 15Y
- Defensive risk profile with beta below 0.85 and downside capture consistently below upside capture across all periods
- Diversified 56-stock portfolio with a reasonable expense ratio of 0.72% for the Direct plan
- SIP XIRR trails the category average at every horizon, including 1Y XIRR of 7.43% versus 14.1% for the category
- Heavy sector concentration in IT - Software at 22.8% of NAV creates vulnerability to technology sector downturns
Generated on 03-09-2026, 3:08 AM. Verify before investing.
Gives more importance to longer time periods (10Y, 20Y) than shorter ones (1Y, 3Y). This balances out recent outperformance and gives a more realistic picture of what long-term returns might look like.
The largest peak-to-trough decline in the fund's NAV. Shows the worst-case loss an investor would have experienced at any point in the fund's history.
If you invested ₹1,00,000 every month via SIP, here's how this fund has historically performed across different time horizons.
| Duration | Invested | Median Value | XIRR | Min XIRR | Max XIRR |
|---|---|---|---|---|---|
| 1 Year | ₹12.00 L | ₹12.68 L | 16.5% | -42.8% | 75.5% |
| 3 Years | ₹36.00 L | ₹43.19 L | 13.9% | -15.0% | 39.4% |
| 5 Years | ₹60.00 L | ₹86.52 L | 14.3% | -5.7% | 26.5% |
| 7 Years | ₹84.00 L | ₹1.46 Cr | 15.1% | 0.4% | 22.6% |
| 10 Years | ₹1.20 Cr | ₹2.58 Cr | 15.0% | 11.0% | 18.8% |
| 12 Years | ₹1.44 Cr | ₹3.47 Cr | 13.7% | 11.0% | 16.9% |
SIP returns vs benchmark & category
Annualised SIP return (XIRR) over each rolling horizon — like-for-like, not lump-sum.
| Duration | Fund SIP XIRR | NIFTY 50 | Category avg | Fund edge |
|---|---|---|---|---|
| 1 Year | 16.5% | 14.4% | 14.1% | +2.1% |
| 3 Years | 13.9% | 11.1% | 16.8% | +2.8% |
| 5 Years | 14.3% | 10.4% | 16.9% | +3.9% |
| 7 Years | 15.1% | 10.6% | 16.5% | +4.5% |
| 10 Years | 15.0% | 11.5% | 16.7% | +3.5% |
| 12 Years | 13.7% | 11.4% | 16.3% | +2.3% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 16.2% | 11.9% | -22.0% | 85.8% | 0.50 | 1.66 | 77% | — | — |
| 3 Years | 14.6% | 13.6% | -2.6% | 32.6% | 1.22 | 8.91 | 100% | — | — |
| 5 Years | 14.7% | 14.9% | -0.8% | 25.9% | 1.59 | 11.40 | 100% | — | — |
| 10 Years | 14.4% | 14.9% | 11.1% | 17.2% | 4.40 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY 50
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | -0.46 | 0.83 | 82.8% | 81.3% | -1.8% | -2.9% |
| 3 Years | -0.67 | 0.81 | 83.0% | 82.3% | 6.8% | 7.8% |
| 5 Years | +0.43 | 0.80 | 80.7% | 78.5% | 8.0% | 7.8% |
| 7 Years | +4.84 | 0.73 | 76.4% | 69.8% | 15.2% | 11.8% |
| 10 Years | +2.11 | 0.74 | 76.5% | 72.4% | 11.8% | 10.8% |
| 12 Years | +3.19 | 0.73 | 75.8% | 70.4% | 12.1% | 9.8% |
| 15 Years | +3.57 | 0.70 | 74.0% | 67.6% | 12.3% | 9.7% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | INFOSYS LTD | 6.74% |
| 2 | TATA CONSULTANCY SERVICES LTD | 5.14% |
| 3 | TECH MAHINDRA LTD | 3.39% |
| 4 | HINDUSTAN UNILEVER LTD | 3.28% |
| 5 | BHARAT HEAVY ELECTRICALS LTD | 2.88% |
| 6 | SRF LTD | 2.72% |
| 7 | HCL TECHNOLOGIES LTD | 2.72% |
| 8 | FORTIS HEALTHCARE LTD | 2.61% |
| 9 | JINDAL STEEL LTD | 2.60% |
| 10 | DR REDDYS LABORATORIES LTD | 2.55% |