Will the Tata tussle impact MF investors? Find out

Though Cyrus Mistry’s ouster from Tata Sons was unexpected, mutual fund investors should not react in a knee jerk fashion. Mutual funds have over Rs 29,000 crore invested in Tata Group stocks. But the exposure is so widely dispersed across several schemes that the impact of the recent decline in Tata Group stocks has not significantly impacted individual schemes.

For example, the Reliance Tax Saver, which had 5.8% of its corpus in Tata Steel as well as 1.6% holding in Trent, fell by 1.6% after Mistry’s ouster. Franklin India High Growth companies, which had 5.2% of its corpus allocated to Tata Motors DVR fell by 0.8%. Even the concentrated logistics fund, UTI Transportation and Logistics, which has 9.3% exposure to Tata Motors, fell by just 0.5%.

Investors must note that most of the stocks held by mutual funds are backed by fundamentals and fund managers would take a call on whether to buy into dips in certain stocks, based on the fall as well as analysing the impact of the allegations. These companies have their own boards and full-time directors and are not run on a day-to-day basis by the Chairman of the group.


If you are a mutual fund investor, take comfort from the fact that there are fund managers to do the job of adding or weeding stocks for you. Hence, don’t lose sleep over the corporate tussle and tune off from watching your fund’s day-to-day gyrations.

(The author, Vidya Bala, is Head, Mutual Fund Research, FundsIndia.com.)