FAQs

Question

Tata Ethical Fund has been certified by TASIS. Yet we find companies with High Debt Ratio included in the portfolio holdings of Tata Ethical Fund. Please clarify.

Answer

TASIS has indeed certified Tata Ethical Fund and it also monitors the Fund’s investments regularly; to date, we have not noticed any discrepancies as you cite. You are perhaps referring to the Debt-to-Equity ratio. TASIS on the other hand evaluates the performance of the companies on the Debt to Total Assets ratio, as approved by TASIS Shariah Board. Most screening agencies use an upper limit of 33% whereas TASIS has an upper tolerance limit of 25%. Hence TASIS norms (including even its definition of Debt itself) are generally more stringent than those of screening agencies across the globe. Please confirm your results and revert to us if you still have any doubts