Tata Nifty Auto Index Fund – Direct-Growth: Key Insights, Returns, Risks, and More

The automobile sector is one of the most in-demand sectors when it comes to investment in India and why not? The Indian automobile industry is the world’s third-largest automobile market by sales, and it comes fourth in valuation and production. The automobile industry has always been an indicator of economic growth in India as well because when the income of the people goes up, the sales of automobiles go up. Not only domestic sales but also Indian auto companies are known for their market in foreign lands. So, investing in this industry can be fruitful in the long run if planned wisely and one fund which can be considered is the Tata Nifty Auto Index Fund Direct-Growth. 

This article will revolve around the details of the Tata Nifty Auto Index Fund. You will read all the insights about this fund, starting from its returns to the risk involved, different financial metrics you can evaluate from here, and more. 

Fund Management and Objectives

Tata Nifty Auto Index Fund Direct-Growth replicates the portfolio of the Nifty Auto Index and tries to achieve the index’s performance with some room for tracking error. The return that the fund manager wants to generate with this fund is the return before levying the mutual fund’s expenses. The fund tracks the Nifty Auto Index (TRI). 

The fund was launched in April 2024, making it one of the newest funds. The data nifty auto index fund nfo came on 26 April 2024, making the fund not even a year old. 

Tata Nifty Auto Index Fund Direct-Growth has been managed by – 

1. Kapil Menon has worked at the Tata Mutual Fund since 2006 and has managed many funds, especially index funds and ETFs. 
2. Rakesh Prajapati, who also has extensive experience managing index funds, has been managing this fund since December 2024. He worked with ICICI Securities Ltd., Edelweiss Securities Ltd., and other mutual fund houses before joining Tata Mutual Fund. 

Excited about investing in the Tata Nifty Auto Index Fund? Open a free Demat account today!

How does the Tata Nifty Auto Index Fund Work?

The Tata Nifty Auto Index Fund invests in the stocks that are present in the Nifty Auto Index and it tracks the total return of the index. Now, as the portfolio of the index changes as per its rescheduling period, the fund also alters the portfolio of the fund to match the portfolio of the index. 

The fund tries to replicate the performance of the Nifty Auto index by investing in the stocks in the same proportion. This makes the return of the fund similar to that of the index and if there is any difference that is owing to any tracking error in the process. 

Performance and Returns (As of 24 Jan 2025)

Since Tata Nifty Auto Index Fund Direct-Growth is a new fund, not even a year old, let’s see the return it generated in this period and then try to understand how the index that it tracks has been performing over the years to have some idea about the fund’s probable performance. 

Time Frame	Tata Nifty Auto Index Fund Direct-Growth (%)
Since Inception	-0.62
6 Month	-12.19
3 Month	-8.96
1 Month	-2.30
1 Day	-1.55
YTD	-2.93

Time Frame	Nifty Auto Index (TRI) (%)
Since Inception	17.56
5 Year Return	23.87
1 Year Return	23.58
YTD	22.64
3 Month	-15.69

As seen in the tables above, the index that the fund tracks has been performing consistently well for years. However, the fund which has just been launched nine months back is yet to match the index’s return. 

Investment Allocation (As of 31 Dec 2025)

The Tata Nifty Auto Index Fund Growth has an all-equity profile currently, even when the ratio of equity in the portfolio is 100.03% and this extra 0.03% is due to its negative positions in the cash and cash equivalents. 

Market cap-wise asset allocation 

• Giant cap – 62.48%
• Large Cap – 26.32%
• Mid-cap – 11.20%

As of 31 December, the fund had an average market cap of ₹192286 crore and it spans

across 15 stocks where the top 10 stocks make up 89.17 % of its assets. 

Sectoral Allocation 

The fund is mostly invested in the consumer discretionary sector and here is the sector-wise allocation of its fund – 

Sectors	Allocation (%)
Consumer discretionary	97.07
Industries	2.96

Stock-wise Allocation 

Top five stocks of the icici prudential large & mid cap fund direct plan growth – 

Stock	Assets (%)
Mahindra & Mahindra	25.16
Tata Motors	14.75
Maruti Suzuki	13.42
Bajaj Auto	9.17
Eicher Motors	6.23

Key Metrics 

As of 31 December 2024, the fund has an expense ratio of 0.45%, which is nominally higher than the category average of 0.27%.

Fund Details	Information
AUM (Assets Under Management)	₹76 Crore as of 31 December 2024
Category	Equity Fund
Fund Managers	Kapil MenonRakesh Prajapati
Exit Load	0.25% for redemption within 15 days
Entry Load	Nil
Minimum Investment	₹5000(Lump sum)₹100 (SIP)
Benchmark	Nifty Auto Index (TRI)

The Tata Nifty Auto Index Fund NAV as of 27 January 2025 stood at ₹9.9384. 

Risk and Performance of the Tata Nifty Auto Index Fund 

This fund is classified as a ‘Very High Risk’ fund, which indicates that the fund has the potential for higher returns but there will be high volatility as well. However, the fund is not even a year old, and risk analysis can only be done after at least 2-3 years of the launch of the fund. So, we can look at the data of the Nifty Auto Index that it tracks to get some clarity. 

1. Standard Deviation (Std Dev %): It shows how much the returns vary from the average returns generated by the funds themselves. The higher this number, the more it fluctuates.

The nifty auto index has a standard deviation of 18.57 in 1 year, and since inception, it has been 23.48. 

2. Beta: This ratio indicates the volatility of the fund’s performance, compared to similar funds in the market. The lower the Beta, the more predictable the returns are, and vice versa. It helps in comparing funds. 

The Nifty Auto Index has a beta of 1.02 for 1 year and 0.88 since inception compared to Nifty 50. 

3. Correlation:  This financial metric suggests whether and how much the fund is correlated with the market. 

The index that the fund tracks has a correlation of 0.76 with Nifty 50 in the last 1 year, while since inception it has been 0.81. 

Taxation for Tata Nifty Auto Index Fund 

If you’re investing in the Tata nifty auto index Fund, here’s how your returns will be taxed:

1. Short-Term Gains – If you sell the fund units within 1 year of the date of investment, a 20% tax will be levied on the entire return generated during the period. 
2. Long-Term Gains – If you sell the fund units after one year, any profit generated over and above ₹ 1.25 lakh will be taxable at a 12.5% rate. The same rate will be applicable for any investment tenure above 1 year. 

So, the longer you hold your investments, the better returns you can expect and the lesser effect of taxes!

3. Taxes on Dividends – Dividends earned if any will be taxable at the hands of investors as per their tax slabs. If the dividend income surpasses Rs. 5000 in a financial year, then the fund house will deduct 10% TDS before disbursing the dividend into the account of the investor. 

Minimum Investment and Lock-in Period

The minimum investment amount in the Tata Nifty Auto Index Fund is ₹5000 for lump sum and SIP, it is ₹100. There is no lock-in period for the Tata Nifty Auto Index Fund Direct-Growth.

Invest in the Tata Nifty Auto Index Fund — SIP or lump sum at zero brokerage!

How to Invest in Tata Nifty Auto Index Fund Direct?

You can invest in the Tata Nifty Auto Index Fund – Direct Growth plan with Shoonya. 

Shoonya offers a free Demat account,  Zero brokerage trading, advanced trading tools, 100+ technical indicators, and much more!

Investing in Lump Sum Mutual Funds through the Shoonya Web Platform

Here’s a quick guide on how to invest in lump sum mutual funds through the Shoonya web platform:

1. First, you must log in to your Shoonya account at trade.shoonya.com. From the “Orders” section, click on “MF order.”
2. Search for the fund you wish to invest in; in this case, the Tata Nifty Auto Index Fund – Direct Growth plan.
3. Choose “Fresh” for a new investment and enter the amount you want to invest.
4. You can complete your purchase by clicking the “Purchase” button.
5. You will receive a payment link on your registered email. Use the link to make the payment.

After payment, your mutual fund units will be allotted to your Demat account within T+2 days.

Note: You can only make the payment using the bank account registered with your Demat account.

Setting Up an SIP for Mutual Funds

If you prefer a Systematic Investment Plan (SIP) for Tata Nifty Auto Index Fund Direct Plan-Growth plan, you must follow these steps:

1. First, you need to log in to your Shoonya account at trade.shoonya.com. Go to “Orders” and click on “XSIP.”
2. Find the mutual fund for which you want to set up an SIP. In this case, the Tata Nifty Auto Index Fund – Direct Growth plan.
3. If this is your first SIP with Shoonya, you need to create a Mandate ID. 

For that, you must enter the mandate amount and the validity date (until you want to keep your SIP active).

4. You must submit the details, and you’ll receive a Mandate authentication link via email. Approval generally takes 24 hours.

Once your Mandate is approved, you can follow these steps to set up your SIP:

1. Go to “XSIP,” enter the SIP amount, and select “Fresh” as the transaction type.
2. Choose the date when the SIP will be debited directly from your registered bank.
3. The approved Mandate ID will auto-reflect.
4. Choose “Monthly” for monthly debits and specify the number of instalments (e.g., 24 instalments for a 2-year SIP).

If you do not want to forget your SIPs and invest systematically, the SIP method can be most suitable for you. 

Why Invest in the Tata Nifty Auto Index Fund?

The reasons for investing in the ICICI Prudential Large & Midcap Fund Direct-Growth can be the fund’s – 

• It is a sectoral index fund which can help in generating higher returns 
• The automobile market in India is flaring 
• It is taxed as an equity fund which offers tax benefits

Suitability of this Fund| Who Should Invest?

The Tata Nifty Auto Index Fund Direct is suitable for investors who:

• Are looking for higher returns and ready to take higher risk 
• Looking for long-term capital appreciation 

Conclusion

So, if you are interested in the auto sector and want to invest in it but are not sure of which stock to pick, then this fund can be a great option for you. Tata Nifty Auto Index Fund Direct-Growth can give you the desired exposure to the auto industry. 

FAQs| Tata Nifty Auto Index Fund Direct Plan-Growth

Source: ValueResearch

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.