There are all together 48 Equity Linked Saving Schemes (ELSS) offered by 41 Mutual Fund houses. Out of which 36 are open-ended schemes and 12 are close-ended schemes. The industry wide assets for all ELSS are INR 26,515 Crore (as at 30 November 2010) representing around 4% of industry corpus.
Here we highlight our top 5 recommend ELSS!
Tax Advantage Fund
Fund was launched on 05 January 2006 and is managed by Mr Sandeep
the fund has leeway to invest across market capitalisation, however it
mostly managed as a large-cap biased portfolio with around 70% of its
consistently in large-cap stocks. The fund manager follows a bottom-up
picking approach. In terms of sector exposure, at the end of October
2010, the fund
has highest concentration on banks with around 18% in banking stocks,
by pharmaceuticals sector constituting around 10% of the portfolio. The
positive on this sector for quite some time. The
fund does not take
cash calls and is almost completely invested (above
95%) across all market scenarios. The fund is well diversified and has
to 70 stocks in the portfolio compared to couple of years back when the
portfolio used to have more than 80 stocks.
Size: The Assets under
Management (AUM) of
the scheme is around INR 1,300
crore (as at 31 October 2010) and is the sixth largest fund in terms of
Performance: In terms of
performance, the fund has
outperformed its benchmark as
well as category average across all time periods - 6 month, 1 year or 3
inception, the fund has given return of CAGR 19.14% as compared to
the BSE 200 (as at 30 November 2010).
Tax Saver Fund
Tax Saver is
one of the oldest ELSS and was launched on 18 December 1995. Mr
Vinay Kulkarni is managing the fund since
21 November 2006.
fund manager actively moves across market-cap based on his outlook on
market which is visible from his portfolio positioning. In March 2008
market was in bear phase, the fund had around 78% in large cap stocks
markets started recovering in June 2009, the fund manager reduced the
to large-cap to 71% and later, to around 60% in September 2009.
fund is well diversified with around 50 stocks in the portfolio which
increased from 20 stocks in 2003. The fund normally does not take huge
calls however, the fund did move into debt and cash securities to the
8% to 10% from June 2009 to September 2009 after the huge rally posted
equity markets in May 2009 on the back of UPA government getting a
the general election.
Size: The fund is second
largest in terms of
AUM and has around INR 2,948 crore
corpus (as at 31 October
Expense Ratio: The scheme
has one of the lowest
expenses in the category.
Performance: Over a 10 year
period, HDFC Tax Saver
is the best performing scheme
and has outperformed the benchmark and category average by huge margin.
fund has given CAGR return of 30.20% as compared to 17.89% delivered by
benchmark S&P CNX 500 and 19.14% by the category average (as at
2010) in last 10 years.
is the newest scheme from the list that we have selected and is about
complete four years on 29 December 2010.
fund is diversified
and has invested around 30% to 40% of the
portfolio in midcap stocks. The fund manager, Mr Vetri Subramaniam
churn between sectors and in last six months, the fund manager has
exposure to Banking from around 9% in May 2010 to above 15% as on
and from 2% of the exposure in Engineering in March 2010 to around 6%
the corpus of
scheme (INR 109.67 Crore as at 31 October 2010) is small, the fund has
remarkable performance and finds a place in our top 5 recommend scheme.
Performance: The fund has performed better than
benchmark in both bull and bear
market. In 2007, when the market was on upswing, the fund has given a
64.40% as compared to 59.74% by the benchmark, BSE 100. In 2008, when
was in bear phase, benchmark has given negative return of 55.28%
whereas fund generated
a less negative return of 49.51%. In 2009, the fund performed in line
benchmark with both giving return of 83.40% and 85.03% respectively.
to date (YTD), the fund has outperformed the benchmark by a huge margin
given a return of 20.61% as compared to 11.38% by the benchmark (as at
Tax Saver Fund
launched on 25 July 2005. The fund is managed by Mr Ashwani Kumar who
10 years of experience in the Industry.
fund is managed in a concentrated way with 30 to 40 stocks in the
with good mix of both large-cap and mid-cap names. The fund manager
take huge cash calls based on the market outlook but most of the time,
did not go in fund manager’s favour. Towards end of September
2007, the fund
had around 17% in cash and cash equivalent and it hurt the performance
fund. In September and October 2007 when the benchmark gave return of
and 15.87% respectively, fund gave a return of 11.57% and 5.27 %
Similarly in 2009, during month of April, May, and June when the fund
had on an
average 21% in cash and cash equivalent, the market gave a positive
68.72% in three months, whereas fund gave return of only 55.58%. However
in 2010, the fund hardly took cash
calls and the investment in cash and cash equivalent was only 5% on an
This has helped the fund to outperform the benchmark by huge margin.
benchmark, BSE 100 has given return of 11.38% YTD, whereas the fund has
20.86% (as at 30 November 2010). The fund manager doesn’t
sector churning as the portfolio’s exposure to various
sectors has been
consistent in last one year.
is the third largest
in terms of AUM.
Expense Ratio: The expense
ratio of the fund has been
among the lowest in the
Performance: The fund has
outperformed the benchmark
in last 6 month, 1 year and
3 years. Since inception, the fund has delivered a CAGR return of
compared to 17.21% delivered by benchmark, BSE 100.
Tax Saver Fund
November 1999, Sundaram Tax Saver fund is a large-cap biased portfolio.
fund is managed by Mr Satish Ramanathan, Head of Equities at Sundaram
Strategy and Performance:
fund has a concentrated portfolio of 35
to 45 stocks with 65% to 75% of the portfolio invested in large-cap
fund is very actively managed and is also known for taking cash calls
fund manager is not bullish on the market.
call which the fund took in 2008 really helped the fund; it was on an
more than 16% in cash. The fund went up to 36% in cash in November 2008
the fund outperform the benchmark. The benchmark, BSE 200 has given a
return of 56.46% whereas the fund gave a negative return of only
However in the market recovery next year, the fund underperformed the
by huge margin as it returned only 72.02% compared to the benchmark
the performance of Sundaram Tax Saver has been good over long periods
the second best performing fund in last 5 years (as at 30 November
delivering CAGR of more than 20%.
Size: In last 2 years, the
fund has seen its
AUM increasing substantially
from around INR 480 Crore to more than INR 1,600 Crore (as at 30
Table 1: Comparison of performance of our recommend
Tax Advantage (G)
Tax Saver (ELSS)(G)
| Return less
than 1 year are absolute and greater than 1 year are annualised .
iFAST Compilations. Data as on 30 November