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Should You Invest in Tata Ethical Mutual Fund?
Tata Ethical Mutual Fund is an investment solution based on the Shariah principles. It focuses on companies that follow ethical standards and avoid restricted sectors. The fund is suitable for those who need financial growth without compromising on their cultural beliefs.
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What is the Tata Ethical Mutual Fund?
The Tata Ethical fund is an open-ended equity scheme managed by Tata Asset Management Ltd., which invests only in Shariah-compliant companies. This means that sectors such as alcohol, tobacco, gambling, and conventional banking & finance services are not included.
Best Investment Plans in UAE
Some of the best Investment quotes in UAE & Dubai are:
Tata Ethical Fund- Quick Overview
|
Fund Launch Date |
24th May 1996 |
|---|---|
|
Fund Size (AUM) |
INR 3675.11 Cr* |
|
Expense Ratio |
0.66%** |
|
Exit Load |
0.50% of NAV (Within 90 days) |
|
Fund Risk Profile |
Very High |
- * As on 9th November 2025
- ** As on 30th September 2025
Tata Ethical Mutual Fund- Key Details
The fund takes a bottom-up stock-picking approach, selecting companies that meet Shariah-compliance criteria and looking for growth and value opportunities.
Asset allocation as per the Scheme Information Document:
- 80–100% in equity and equity-related instruments of Shariah-compliant companies
- 0–20% in other Shariah-compliant instruments
This strategy ensures ethical diversification and also maintains equity-driven growth potential.
Types of Tata Ethical Fund
Primarily, two variants of this fund are available –
- Tata Ethical Fund Growth- Refers to the Regular Plan Growth option of the scheme, where the investor pays the standard cost (which may include distributor commission).
- Tata Ethical Direct Plan Growth- The variant where the investor goes directly to the AMC without intermediaries, leading to lower cost and potentially higher net returns.
Top Investing Sectors of the Mutual Fund
The following are the top sectors where the Tata Ethical Fund invests in–
|
Sector |
Allocation* |
|---|---|
|
Information Technology |
21.19% |
|
Healthcare |
12.94% |
|
Automobile and Auto Components |
9.75% |
|
Fast Moving Consumer Goods |
9.75% |
|
Oil, Gas, and Consumable Fuels |
9.25% |
|
Capital Goods |
6.83% |
|
Chemicals |
6.35% |
|
Consumer Durables |
5.91% |
|
Metals and Mining |
3.45% |
|
Construction Materials |
2.78% |
While the Tata Ethical Mutual Fund is a strong ethical equity option in India, AED-based investment plans are smarter, more stable, and better aligned in terms of —
- Currency Stability: AED is pegged to USD. This makes UAE investments far more stable compared to INR, which is prone to long-term depreciation.
- Better for UAE Goals: If your earnings, expenses, and future plans are in the UAE, investing in AED/USD avoids currency mismatch risk.
Tata Ethical Mutual Fund vs HAYAH Simple Saver Plan
Let’s see how the Tata fund stacks against a leading option for investment in UAE —
|
Feature |
Tata Ethical Mutual Fund (India) |
HAYAH Simple Saver Plan (UAE) |
|---|---|---|
|
Investment Type |
Equity Mutual Fund |
Long-term Savings & Investment Plan |
|
Currency |
INR (Indian Rupees) |
USD/AED-linked (Dollar-based stability) |
|
Shariah Compliance |
Yes |
Optional Shariah-compliant portfolios |
|
Risk Level |
Very High (100% equity exposure) |
Low to Moderate (Multi-asset portfolios) |
|
Minimum Investment |
₹100 SIP (~1.11 USD) |
USD 20 per month |
|
Investment Horizon |
Medium to Long-Term |
Minimum 5 years, extendable till age 74 |
|
Fund Management |
Tata Asset Management |
BlackRock (Global Asset Manager) |
|
Asset Allocation |
80–100% Equity |
Diversified across asset classes |
|
Liquidity |
Market-linked, exit load within 90 days |
Online access, flexible withdrawals |
|
Expense / Management Fee |
0.66% (Direct Plan) |
0.50% – 1.25% (reduces as value grows) |
|
Investor Base |
Indian Residents & NRIs investing in India |
UAE Residents |
|
Best For |
High-risk ethical equity investors |
Stable, long-term, hassle-free savings |
Quick Verdict for Readers
✅ Choose HAYAH Simple Saver (UAE) for stable, dollar-based savings, global diversification, low fees, and long-term financial security in the UAE. While the Tata fund is a good investment option, the downsides discussed above make UAE-based investments much more attractive.
On Policybazaar.ae, you can find many such options.
Best Investment Funds in UAE 2025
Here are some more options for mutual fund UAE based on your investment behaviour —
| Returns | |||||
|---|---|---|---|---|---|
| Fund Name | 1 Yr | 3 Yr | 5 Yr | Since Inception | |
 Moderate BlackRock Managed Index Portfolios - Defensive | 7.99% | 3.25% | 2.87% | 3.44% | |
Moderate BlackRock Managed Index Portfolios - Growth | 5.57% | 5.92% | 9.19% | 8.36% | |
Aggressive BlackRock Managed Index Portfolios - Moderate | 7.08% | 5.8% | 6.49% | 6.22% | |
Moderate HSBC Islamic Global Equity | 8.7% | 13.41% | NA | 8.61% | |
 Moderate ZI Franklin India | 3.86% | 32.42% | 17.7% | 7.5% | |
Aggressive Fidelity Fund Global Technology A-ACC-USD | 8.6% | 13.1% | 17.6% | 17.2% | |
Moderate HSBC Islamic Global Equity | 8.7% | 13.41% | NA | 8.61% | |
Aggressive KotakFunds : India Midcap Fund | 6.99% | 13.36% | 24.15% | 13.64% | |
Moderate Pinebridge India Equity Fund | 26.8% | -14.9% | 8.3% | NA | |
Conservative Zurich Carbon Neutral World Equity Fund | -19.69% | 29.03% | NA | NA | |
Top Holdings of the Tata Mutual Fund
The top 10 holdings of this Tata mutual fund are–
|
Company |
Sector |
Allocation* |
|---|---|---|
|
Infosys Ltd. |
Technology |
6.38% |
|
TCS Ltd. |
Technology |
5.41% |
|
Hindustan Unilever Ltd. |
Consumer Staples |
3.96% |
|
Srf Ltd. |
Chemicals |
2.84% |
|
Cummins India Ltd. |
Capital Goods |
2.84% |
|
HCL Technologies Ltd. |
Technology |
2.80% |
|
Ultratech Cement Ltd. |
Construction |
2.78% |
|
Hero Motocorp Ltd. |
Automobile |
2.62% |
|
Bharat Petroleum Corporation Ltd. |
Energy |
2.44% |
|
Alkem Laboratories Ltd. |
Healthcare |
2.25% |
*As of 30 Sep, 2025. Investment allocation is subject to change.
Performance and Suitability of the Tata Ethical Mutual Fund
Although past performance does not guarantee future results, the scheme's returns reflect its thematic and equity-intensive nature. For the Direct Plan Growth, 3-year annualised returns are approximately 11.9% (as per recent data), though returns may vary.
This fund is suitable for investors who:
- Want an ethical investment option aligned with Shariah principles.
- Are comfortable with equity market volatility and have a medium to long-term investment horizon.
- Prefer to invest in Tata Ethical Fund SIP (minimum ₹100) and are willing to use the Direct Plan Growth variant to keep costs low.
Risks and Things to Consider
Here are some of the risks associated with the mutual fund that you must take into consideration–
- Since the fund invests only in Shariah-compliant companies, it can lead to greater deviation from the broader market.
- Being equity-heavy, it is inherently riskier than diversified or debt funds.
- The expense difference between the Regular Plan Growth and the Direct Plan Growth can materially affect returns over a long horizon.
- Always check the latest Scheme Information Document (SID), Key Information Memorandum (KIM), and fact-sheet before investing.
In a Nutshell
The Tata Ethical fund offers a niche but clearly defined investment approach, equity exposure aligned with Shariah principles. With small SIP entry points and options for direct and regular plans, it is well-suited to investors with a long-term horizon and high risk tolerance. However, one should weigh its thematic nature and cost structure before investing.
Although TATA Ethical Mutual Fund is among the leading funds in India, there are many comparable mutual funds in UAE. With Policybazaar UAE, you can explore a variety of the best investments in UAE.
Frequently Asked Questions
What is the difference between Tata Ethical Fund Growth and Direct Plan Growth?
The Tata Ethical Fund Growth option includes distributor commissions, while the Tata Ethical Direct Plan Growth offers a lower expense ratio and higher potential returns since it’s a direct investment option.
Is the Tata Ethical Mutual Fund suitable for NRIs?
Yes, NRIs can invest in the Tata Ethical Fund, making it a preferred ethical equity investment for global investors.
What are the risks of investing in the Tata Ethical Fund?
The Tata Ethical Fund carries high equity market risk and is restricted to Shariah-compliant sectors, which limits diversification.
Who should invest in the Tata Ethical Mutual Fund?
This mutual fund is suitable for long-term investors seeking a Shariah-compliant equity exposure with a high-risk, high-return profile.
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