The tax-return filing season just a few months away, check out the tax saving ELSS funds for reducing your tax outgo.
When you invest for five years or above, you can expect gains that
comfortably beat the inflation rate and are also higher than fixed income
options. In addition, you get tax exemption on the invested amount under
Section 80C of the Indian income tax laws. As per this section, total
investments of upto Rs 1.5 lakh in a financial year in eligible securities such
as this fund are exempt from tax.
Here we review two TOP tax saving ELSS funds-
- Mirae Asset Tax Saver Fund
- Axis Long Term Equity Fund.
The scheme seeks
to generate long-term capital appreciation from a diversified portfolio of
predominantly equity and equity related instruments.
- Fund manager with a long track
record – Over 24 years of market experience (12 years as a fund manager)
- Consistent performance – 5% CAGR out performance over the Nifty 200 TRI since 28 Dec 2015
- Investment style – Growth at
Reasonable Price
- Multicap portfolio with a large
cap bias – 71% portfolio in large caps
- Well-diversified portfolio – Total
56 stocks
- Top 10 stocks – 48% of the
portfolio
Snapshot
- Fund Manager – Neelesh Surana, CIO
of Mirae Asset
- Fund Launch – 28 Dec 28 2015
(4-year track record)
- AUM – Rs. 3066 Crores
- Market Cap Allocation – 71% Large
cap / 23% Midcap / 5% Smallcap
- 1yr / 3yr Returns (CAGR) – 18.09% /
19.29%
Experienced Fund
manager with a proven track record
Mirae Asset Tax Saver fund is managed by Neelesh Surana (Chief
Investment Officer) who also manages other flagship schemes such as Mirae Asset
Large Cap Fund and Mirae Asset Emerging Bluechip Fund.
Performance
Snapshot:
While 4 years is a short time to evaluate the consistency of performance of an equity fund, we can take a look at another similar fund, Mirae Asset Large Cap Fund that Neelesh Surana has been managing since Apr-2008.
While 4 years is a short time to evaluate the consistency of performance of an equity fund, we can take a look at another similar fund, Mirae Asset Large Cap Fund that Neelesh Surana has been managing since Apr-2008.
There is a 77% portfolio overlap between Mirae Asset Tax Saver and
Mirae Asset Large Cap Fund, and hence the latter can be considered a good proxy
for understanding the potential of Mirae Asset Tax Saver.
On a 3-year rolling return basis, the Mirae Asset Large Cap Fund
has outperformed the Nifty 100 TRI 100% of the time with an average
outperformance of ~5.3%.
Also since its inception in April 2008, Mirae Asset Large Cap Fund has delivered outperformance of ~5.3% (15.6% CAGR vs 10.3% Nifty 100) based on point-to-point returns
The performance data also alludes to this as shown in the below
table
About the fund
manager
Neelesh Surana – Chief Investment Officer
He joined Mirae Asset in 2008. In his capacity as CIO, Neelesh
spearheads the research and fund management functions. An engineering graduate
with an MBA in Finance, Neelesh has over 24 years of experience in equity
research and portfolio management.
Investment
Approach
The investment approach is centred around participating in
high-quality businesses up to a reasonable price and holding the same over an
extended period of time.
The scheme tries to identify companies which have a sustainable
competitive advantage – stocks which have strong pricing power and are sector
leaders.
Overweight: Pharma (6.5%), Textiles (3.7%)
Underweight: Financials (36.6%), Energy (11.2%),
Telecom (0%)
Multicap
portfolio with large cap bias
Axis Long Term
Equity Fund :
Well Diversified
portfolio:
- Total Number of Stocks – 56
- Top 10 –
contribute to ~48% of the portfolio
- Top 20 – contribute to
~71% of the portfolio
- Top 3 Sectors –
Financials, Energy and FMCG. They contribute to ~58% of the portfolio
- Positioned to play the ‘Quality’
style of investing – High portfolio ROCE at ~20%
- Fund manager with long term track
record – 17 years of equity experience (11.5 years as a fund manager)
- Consistent performer – 7.1% CAGR
outperformance over the Nifty 200 TRI since 29 Dec 2009
- Investment style – Quality +
Growth
- Multicap portfolio with large cap
bias – 75% in large caps
- Concentrated portfolio with 30-35
stocks
- Buy and Hold strategy – ~75% of
the current portfolio of stocks has been held for more than 5 years
Snapshot
- Fund Manager – Jinesh Gopani, Head (Equity), Axis Mutual Fund
- Fund Launch – 29 Dec 2009 (10-year
track record)
- AUM – INR 21,473 Crores
- Market Cap Allocation – 75% Large
cap / 23% Midcap / 2% Smallcap
- 1yr / 3yr Returns (CAGR) – 18.88% / 17.41%
An experienced
Fund manager with a proven track record
Jinesh Gopani, Head – Equity of Axis Mutual Fund, has been
managing this tax saving ELSS fund for nearly 9 years since Apr-11. As head of
the equity investment division, he also manages other key funds like Axis
Focused 25 and Axis Growth Opportunities.
On a 3-year rolling return basis, Axis Long Term Equity Fund has
outperformed the Nifty 200 TRI 86% of the time with an average outperformance
of ~7.0%.
As seen above, the fund has fallen relatively lower than the index
during periods of market declines, indicating the high-quality nature of the
portfolio.
About the fund
manager
Jinesh Gopani – Head (Equity)
He joined Axis Mutual Fund in 2009 as Senior Fund Manager. In 2016
he was promoted as Head – Equity, responsible for the entire equity investment
division of Axis Mutual Fund. Jinesh, a post-graduate with MBA in Finance, has
over 17 years of experience in equity research and portfolio management.
Investment
Approach
The fund follows the Quality style of investing – investing in
high-quality growth companies. The fund takes a very focused approach of
investing in 30-35 stocks.
The fund manager’s expertise in picking high-quality businesses
with relatively high growth potential can be seen from the proven track record
of more than 10 years.
The fund also follows a buy and hold strategy with low portfolio
churn. This is evident from the fact that the fund’s Oct-19 portfolio retains
75% of the portfolio stocks it held 5 years back (Oct-14).
Portfolio
Positioning
Overweight: Financials
(41.0%), Consumer Goods (16.8%), IT (13.4%), Automobile (9.4%)
Underweight: Energy (3.4%), Pharma (1.4%),
Construction (1.2%), Cement (0%), Metals (0%), Telecom (0%)
Multicap portfolio with large cap bias
Multicap portfolio with large cap bias
Concentrated
Portfolio
- Total Number of Stocks – 32
- Top 10 – contribute to ~66% of the
portfolio
- Top 20 – contribute to ~91% of the
portfolio
- Top 3 Sectors – Financials,
Services and Automobile. They contribute to ~63% of the portfolio
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