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Best of ELSS: Reliance Tax Saver
January 24, 2013

In the recent past, this one has been making its mark on the performance charts. Investors should check out this actively managed portfolio.

Author : Larissa Fernand

 Best of ELSS: Reliance Tax Saver
Fund: Reliance Tax Saver
Category: Equity Linked Savings Scheme – equity funds with a tax benefit under Section 80C
Benchmark: BSE 100

This fund has been putting up a fantastic performance recently. In 2012, it delivered an impressive return of 46%, making it the second-best performer in its category. Even its current 1-year return puts it amongst the top of the pile.

Though the fund house positions this offering as a large-cap oriented fund which aims to have a minimum 50% exposure to the top 100 companies by way of market capitalisation, it’s large-cap bias is not as distinct as some of its peers in the same space. Over the past 3 years, our research reveals that the average large-cap allocation has been at 54%, followed by mid caps (21%) and small caps (15%).

As mentioned above, the portfolio will have a minimum 50% exposure to BSE 100 (its benchmark) or the top 100 companies by way of market capitalization. The rationale to provide the leeway to invest in smaller companies is to grab hold of unique stock ideas which have a predominant growth bias and to use aggressive sector weights. As on December 2012, the top 3 sectors – Auto, Industrial Capital Goods and Industrial Products, cornered 43% of the portfolio.

The latest portfolio revealed that the fund has around 49 stocks, out of which just 21 have been in the portfolio for more than 2 years.

Though its mandate gives it the option of a flexible cash allocation right up to 25% of the portfolio, this will be followed only in extreme situations to counter out-of-the-ordinary market circumstances. In fact, cash allocation has often dropped to less than 1% of the portfolio’s allocation since the fund manager prefers to remain fully invested.

What you will find here is an actively managed portfolio, fully invested with strong sector bets.

This fund is part of our recommended list of funds as suggested by our research team.

To read the analysis on Reliance Tax Saver, click here.

To see the other recommended funds, click here.

To buy and sell mutual funds online, click here.

Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information document including statement of additional information. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.Please read our disclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. The name of the Scheme does not in any manner indicate the quality of the Scheme, its future prospects or returns. Please read the Statement of Additional Information and Scheme Information Document carefully before investing.

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