What Makes Equity Linked Saving Schemes A Better Option Than Other Saving Instruments?

The answer is really very simple. When you invest in ELSS mutual funds, you not only save the amount permissible by the government, you also stand to gain from it, because of the high rate of return.

There are, of course, many reasons why you should go the ELSS way.

• The returns are really very good – the year ending 2005 saw ELSS as the best performing in the mutual fund category, showing returns of nearly 60%. In fact, a number of funds have appreciated by more than 80% in their three-year period. However, though in the past few years things have not been so good due to the economic downturn and recession effects, remember equities are long term investments that yield better in the long run ( a span of 10-12 yrs)
• These funds have a lock-in period of three years, which prevents you from unnecessary withdrawals and spending and helps earn a return over time. However, remember to stay invested for longer periods of time to the tune of 10-12 years to reap the best of returns.
• Also, the lock in gives fund managers the freedom to take sector and stock bets, which they are not able to do in the regular equity schemes.
• The dividends you earn will be tax free.
• When you sell the units of these funds, you can avail of the long-term capital gain for which there is no tax. If you sell after one year, you pay no tax. 

Invest in Equity Linked Saving Schemes Online or Download Equity Linked Saving Schemes Application Form Below

Invest in Tax Saver Mutual Funds

What Are Equity Linked Saving Schemes? - ELSS Mutual Funds

These are mutual funds that invest in the stock market and give the tax benefit under Section 80C of the Income Tax Act. How this works is that the fund manager will invest in shares of various companies across various industries. So, in fact, it is a normal equity diversified fund. But there is the added tax benefit which a normal diversified equity fund will not have. This sets it apart. And currently, if you invest in such funds, you get a rebate. This is the immediate plus of the ELSS mutual fund.

These funds have a lock-in period of three years. irrespective of the income, the maximum deductions that can be made from your taxable income are up to Rs 1 lakh 

Invest in ELSS Mutual Funds Online or Download ELSS Mutual Funds Application Form Below

Invest in Tax Saver Mutual Funds

.  

Religare Tax Plan

This one has made its mark in a short period of time. The fund’s ability to provide good downside protection capabilities accompanied with decent returns during markets rallies will reward investors over the long run.

Strategy
The fund will invest across market capitalisation and sectors utilising a bottom-up approach. It will spread its assets over 20 to 50 stocks without being overly diversified.


With an allocation of over 60 per cent to mid and small caps and a tightly packed portfolio of around 35 stocks, one would have expected the fund to be thrashed in the market downturn of 2008. But its fall of around 50 per cent was 6 per cent below the category average (fourth lowest in the category) and 5 per cent less than the BSE 100, that too without a high cash exposure.

It was the stock picking that made the difference. Out of the 38 stocks which appeared for six months or more in the fund’s portfolio in 2008, 16 (around half the fund’s portfolio) experienced a fall lower than Sensex.

The fund’s focus on bottom-up stock picking leads to quality picks. The mid-cap picks are biased in favour of growth, quality of balance sheet and strength of underlying cash flow rather than sheer undervaluation plays. Momentum and cyclical plays are avoided, which may result in subdued returns during market rallies. In 2009, the fund stayed away from Metals which had a superb run that year. The late entry into Technology also hit performance.
Selective (and unusual) stock picking is the strategy of the fund. Though one may have to wait a while for the bets to play out.

Portfolio

The fund follows a multi-cap strategy. Although benchmarked against BSE 100, the base universe is the BSE 200, to which stocks in the CNX Midcap index are added. Also, a few handpicked companies from the BSE Small Cap and BSE PSU indices are considered. This universe is reviewed every quarter. The fund is well diversified with around 52 stocks. Under normal circumstances, allocation to a single stock is restricted to 6 per cent.


Aggressive sector bets are not unusual. For instance, in December 2008, Financial Services and Petroleum together accounted for almost 50 per cent of the fund’s portfolio. Such positions could impact the fund’s  performance if they do not play out.

With downside protection & decent returns, Religare Tax Plan has already made its mark…

Invest in Religare Tax Plan Online or Download Religare Tax Plan Application Form Below

Invest in Tax Saver Mutual Funds

ICICI Prudential Tax Plan

In its history of around 11 years, the fund has delivered mixed performances. The allocation to mid and small caps led to some exceptionally good years, but was also hit harder during the market downturns. In 2009, it grabbed the top slot with a return of 112 per cent.


The lock-in period of 3 years gives the fund manager the flexibility to make strategic, long-term investments. The portfolio is a mix of large and medium sized stocks chosen after intensive fundamental analysis and research.


This fund is not a large cap one though there will be periods when such stocks dominate. Launched in August 1999, it started off with a large-cap heavy portfolio but soon changed market-cap complexion. This helped the fund deliver exceptionally well from 2003 to 2005.

By 2006 end, the fund held less than 5 per cent in large caps which led to its underperformance. In 2007, its sector moves worked against it. With around a fifth of its portfolio in FMCG and Healthcare, it remained underweight in Metals and Energy. This was because the fund manager was of the opinion that stocks in the Oil & Gas sector were over valued while that of FMCG and Pharma were undervalued. But when the downfall took place in 2008, the fund’s fall of -56 per cent was around the category average. The sector bets and increased exposure to large caps helped (the cash and debt exposure averaged around just 6%). So when the market began to rally in 2009, the fund was in a good position to hop on to it. Exposure to Pharma and the high exposure to mid and small caps led to its fabulous performance.

Portfolio

The portfolio is well diversified across 65 stocks with the top 5 accounting for 22 per cent of the portfolio. This diversification is to balance the strong mid and small-cap tilt. The fund manager restricts the individual sector allocation to 20 per cent and does not exceed 5 per cent for individual stock holdings, barring a few large cap names. When market valuations expand, he tends to increase the number of holdings.

The top three sectors accounting for around 45 per cent of the portfolio is in line with the category average.


Though half the portfolio is currently in large caps and the portfolio is very well diversified, aggressive mid- and small-cap bets also take place. This gives it a risky bent and the fund could get hit harder during the market downturns.

ICICI Prudential Tax Plan's allocation to mid- & small-caps has led to both good & bad performances…

Invest in ICICI Prudential Tax Plan Online or Download ICICI Prudential Tax Plan Application Form Below

Invest in Tax Saver Mutual Funds

HDFC Taxsaver

After beating its peers almost every year (barring 1999 and 2002) in its history of close to 14 years, the fund found itself in the fourth quartile in 2007. It was the only year when it underperformed the S&P CNX 500.

But the very next year, it was back to a top quartile performance. It not only curtailed its fall to a lower level in 2008 but also delivered close to 100 per cent in 2009.

The fund has generated superior returns and shown resilience while protecting the downside time and again. Its 10-year annualised return is 28 per cent (February 28, 2010).


The fund's mandate is not limited across market caps or sectors.

Although currently over half of the fund's assets are into large caps, it has not always been the case. In 2004, almost half of the fund's assets were into small caps. In 2006, when large caps outperformed, the fund increased exposure to large caps to 60 per cent of the portfolio and did it again in 2008.

It is among the very few funds which have invested in the Indian Depository Receipts (IDR) of Standard Chartered PLC (UK) and is amongst the few not holding Reliance Industries in its portfolio. Even in its sector allocation the fund is not wary of contrarian moves. In 2000, when most funds were heavy on IT stocks, this one held onto FMCG stocks and was quick to offload its Tech exposure. It delivered 5.74 per cent that year (category average: -24.13%). In 2009 when Energy was chased (category average exposure: 16%), this fund had just 10 per cent allocated. Its contrarian moves can backfire. Being relatively underweight to Energy and Metals in 2007 led to the dismal performance that year.

Portfolio

The rising asset base has led to an increase in the number of stocks to 55, from around 40 stocks (end 2007). However, the fund has a long tail of stocks (currently 23) each with an allocation of less than 1 per cent. They collectively account for close to 10 per cent of the fund's portfolio. With the top 5 holdings accounting for 22 per cent, the fund looks well diversified. Allocation to a single stock has rarely exceeded 7 per cent after Kulkarni took over in November 2006.


At times the fund is seen taking aggressive sector bets. For instance, Auto (26%) and Engineering (25%) in 2005. Contra sector bets could also backfire.

HDFC Taxsaver will take contrarian bets but its performance history speaks for itself

Invest in HDFC Taxsaver Online or Download HDFC Taxsaver Application Form Below

Invest in Tax Saver Mutual Funds

Fidelity Tax Advantage

Last year’s returns were commendable. But it also stands out for its large-cap bias. In fact, only two tax saving funds (out of 37) fall in the large-cap space. The outcome is that it shields investors better than its peers during market downturns. Since its launch, of the total eight quarters in which its category has been in red, the fund has outperformed its peers in all of them. On the flip side, one has to deal with middling performance during market run-ups.


The fund has no restrictions in terms of market cap, sector or thematic bias. The focus is on bottom-up stock picking approach. The selection of the stocks will be done on the basis of the core strengths of the companies. The fund will control risk through a diversified portfolio with no high allocations to a single stock.


The portfolio is biased towards large caps and clearly towards Financial Services. The sector has accounted for around one fifth of the portfolio since the launch of the fund. However, Kothari claims to have no bias towards any particular sector. He does believe that Financial Services, as a sector, is a good proxy to the overall growth in the economy. To add to it, India still has a low penetration in this space hence the potential to grow and compound returns over the long-term.
The decision to buy or sell a stock is made on the basis of the fund manager’s understanding of the growth outlook, fundamentals and valuations. So even when Metals had a great run in 2007 and 2009, his exposure was limited to around 5 per cent.
Kothari goes by the balance sheet more than what the market is chasing. So it’s not surprising to see that 17 of his holdings have been held in the portfolio almost since inception.

Portfolio

Currently, close to one fourth of its assets are in Financial Services. Despite a large-cap bias, the portfolio is very diversified across 64 stocks. Apart from Reliance Industries, allocation to a single stock has rarely exceeded 6 per cent of the portfolio. However, the fund takes numerous small bets. In December 2010, 28 stocks accounted for less than 1 per cent of the fund’s portfolio.


The large-cap bias does not make it a very exciting offering. While it does give stability, the concentrated sector bets (if the fund manager is comfortable with valuations) could hinder performance if they do not deliver. 

Although not a very exciting offering, Fidelity Tax Advantage does provide stability & consistency…

Invest in Fidelity Tax Advantage Online or Download Fidelity Tax Advantage Application Form Below

Invest in Tax Saver Mutual Funds

Canara Robeco Equity Tax Saver

Though around for a long time, it emerged as a strong contender only from 2007. After average performances in 2005 and 2006, the fund beat its category in 2007 and has done it every year since. That coincided with the Robeco group taking a stake in Canbank Mutual Fund in October 2007 and Anand Shah taking over as a fund manager in September 2008.


The fund manager ensures a diversified portfolio with no market cap or sector bias. The fund invests in growth-oriented companies with strong fundamentals.



Shah has transformed the fund into a diversified and consistent offering. When he took over the fund, he restructured the portfolio to make it focused towards domestic consumption. He has also been pretty successful in utilising the agility that a small fund offers by spotting opportunities and capitalising on them. When he joined in September 2008, he cut down the exposure to Metals to again increase it within two months and finally offload it almost completely by December 2008. This move, along with increased exposure to Banking, helped the fund gain 15 per cent (highest in its category) in December. The fund’s loss in the December 2008 quarter was just 11 per cent (category average: -23%).

When the market turned in March 2009, Shah was almost fully invested (89% to equity). This coupled with stock picking done in 2008 at attractive prices helped the fund deliver 58 per cent in the June 2009 quarter (category average: 47%).

Portfolio

The fund has evolved from a concentrated and risky offering into a more diversified one. Though allocation to a single stock has gone up to 9 per cent, it is seen only in few large caps. Allocation to the top 5 holdings (23%) is in line with the category average. Shah changes the market cap exposure according to market conditions. In 2010, he halved exposure to mid caps and increased it to large caps (currently at around 65%). However, allocation to small caps has barely exceeded 15 per cent since 2007, a drastic change from its past.



The multi-cap strategy could backfire if his call on the market-cap exposure goes wrong. Though Shah is not averse to going against the herd when following his convictions, the contra bets taken might impact the fund’s performance if they don’t play out well.

Canara Robeco Equity Tax Saver's diversified portfolio has enabled it to beat the category in every year since 2007…

Invest in Canara Robeco Equity Tax Saver Online or Download Canara Robeco Equity Tax Saver Form Below

Invest in Tax Saver Mutual Funds

DSP BlackRock Tax Saver Fund - Tax Saving Mutual Fund With Aggressive Nature

This is a fund that takes the growth path. The fund has rewarded investors during market rallies. But when the markets tanked in 2008, the fund lost 57 per cent almost matching the toll taken by the category average and matched its benchmark, the S&P CNX 500. The fall was mostly to do with the fund’s high exposure to mid- and small-cap stocks, which constituted 75 per cent of the portfolio by late 2007.

Both the fund managers; Anup Maheshwari and Mayana Sobti Rajani, restructured the portfolio to be defensive to protect the downside by increasing exposure to healthcare and FMCG and cutting down on metals. Today, the fund maintains a bloated portfolio with 71 stocks in its portfolio, which had touched a high of 97 in March 2008. Such a large number of stocks lead to some of them having insignificant allocation. “Building a position in a particular stock is slow and gradual, as is the case with exits. These may result in some stocks getting less allocation,” says Maheshwari.

On close examination, the fund is largely seen not to exceed 5 per cent holdings in a single stock. “The fund doesn’t have any specific limit to stocks but as far as the sector allocation is concerned we don’t deviate 15 per cent from that of the benchmark,” adds Maheshwari. The fund uses a multi-cap strategy like many of it peers and also deploys cash efficiently and currently holds 60 per cent of its portfolio in the top 100 companies by market capitalisation.


In 2009 mid- and small-cap performed better than large-caps which is reflected in its returns; it delivered 84.22 per cent against a category average of 82 per cent, and this year till November, it has gained 21 per cent compared to 16 per cent gain by the category. The fund has increased its large-cap exposure over the past few months, which can bring stability to its portfolio and returns. The growth oriented portfolio that the fund now has, will pay off in a rising market. However, there is the threat of the fund finding it tough to cushion the loss if the market tumbles.

Invest in DSP BlackRock Tax Saver Fund Online or DSP BlackRock Tax Saver Fund Application Form Below 

Invest in Tax Saver Mutual Funds

Taurus Tax Shield

LAUNCHED in 1996, Taurus Tax Shield is among the oldest schemes in the taxsaving mutual fund category. Although the fund is not so popular among investors, its performance has been impressive since 2007. The fund has only 68 crore of asset under management (AUM), but its small size has not deterred it from generating notable returns
Over the past 17 years, Taurus Tax Shield has demonstrated inconsistent performance for more than a decade. In 1998 and 1999, the fund had outperformed its benchmark index the BSE 200 as well as the broader market indices, the Sensex and the Nifty. Barring these two blockbuster years, the fund had failed to enthuse investors.

   However, since 2007, it has been performing consistently. The returns have been better than the major market indices as well as its benchmark BSE 200. The frequent change in the fund management has surprisingly led to its better performance.

   For instance, in 2007, Taurus Tax Shield generated 110% returns against 50% returns of the Sensex and the Nifty. In the 2008 global financial meltdown, the fund cushioned its fall much better than the markets as well as its peers in the category.The fund continued its winning streak in 2009 and 2010 as well. It returned about 94% gains against the Sensex and the Nifty's 81% and 76% returns, respectively. BSE 200 delivered about 88% return. In 2010, the fund saw a little slowdown in its performance. It marginally outperformed its benchmark and the major market. For instance, Taurus Tax Shield returned 19% against 17% gains of the major market indices.
Taurus Tax Shield has undergone change in the investment strategy owing to change in the fund managers. From being a large-cap fund, with just about 20 stock holdings in the portfolio the fund has transformed to a more diversified fund in 2008. Currently the fund's portfolio has 37 stocks with a ratio of 60:40 in large-cap and mid-cap orientation. The fund is moving towards growth-oriented strategy from its defensive strategy. As a result, it has reduced exposure from healthcare sector. FMCG sector and public sector units are the others where the fund's exposure has less exposure.

Taurus Tax Shield has improved its performance in the past three years. Given the fund's performance in the recent past and its in vestment strategy, it is clearly proven to be worthwhile tax-saving investment. However, investor must keep in mind that the expense ratio of this fund is a little high due to the low-asset base.

Invest in Tax Saver Mutual Funds

   Further, the fund also has exposure in sectors, such as infotech, metal and oil & gas. It is interesting to see that the fund churns its portfolio quiet frequently, moving in and out of sector. It doesn't have even one stock that it holds onto the past two years. In 2010, the fund reduced its engineering stock holding and increased its exposure to the financial sector. The high cash position was a legacy of the fund, but since May 2010, it has reduced its cash exposure to just about 6%.

Invest in Taurus Tax Shield Online or Download Taurus Tax Shield Application Form Below

Sundaram Tax Saver

This fund has performed consistently despite frequent change of fund managers. Over time, it has either beaten the category average (seven years) or performed in-line (two years). But, 2009 turned out to be a blip in its history. It delivered 72 per cent, making it a bottom quartile performer, after being in the top (2008).

The fund invests in stocks across market-cap, with a 3 to 5-year view, sizeable allocation to large-caps, which is the anchor of the portfolio.

Deep cash calls came to its rescue in 2008. There were times when the equity exposure dropped to 63 per cent (the balance being in debt+cash). This helped it show tremendous resilience and shed only 47.58 per cent (category average = minus 56 per cent). The low equity exposure continued in 2009. It averaged at 76 per cent in the first three months and once the rally began, the fund rapidly picked stocks and starting April 2009, its equity exposure rose to 94 per cent. Yet, it delivered only 72 per cent in 2009 (category average = 82 per cent). Even the last six months it has not been very impressive when compared to the category. But, it has built a competitive track record over the long run; 5-year annualised return at 24 per cent.

Despite showing a preference for midand small-caps in its earlier days, it now has a distinct preference for largecaps. This did not change in 2009, even when smaller companies rallied. The fund may look slightly concentrated with 58 per cent allocation to the top three sectors over last one year (category average = 43 per cent) but single stock exposure has rarely crossed six per cent.

Invest in Sundaram Tax Saver Online or Download Sundaram Tax Saver Application Form Below

Invest in Tax Saver Mutual Funds

SBI Magnum Taxgain - Lost Its Sheen

SBI Magnum Taxgain has failed to outperform the benchmark returns due to its defensive positioning even when the market was rallying

LAUNCHED in March 1993, SBI Magnum Taxgain is one of the oldest and largest tax-saving ELSS schemes in the country with an asset under management of over 6,000 crore. An interesting feature of the fund is its stock picking which is more inclined to companies that have disproportionately large market share.  

One of the top-performing schemes before the dotcom bust, SBI Magnum Taxgain fell head over heals in 2000 and 2001. The net asset value (NAV) of this fund melted, twice that of the benchmark BSE 100 as well as the major market indices during this period. 

   Thereafter, the fund recovered in the subsequent four years, beating the benchmark with good margins. For instance, in 2003, SBI Magnum Taxgain generated 132% return as against 72% returns by the Nifty and the Sensex. However, in 2006-07, SBI Magnum Taxgain grossly failed to meet the investor expectations. In 2006, the fund returned just about 44%, marginally outperforming its benchmark's returns of about 41% while in 2007, the year marked by market momentum, it returned just about 55% against BSE-100's 60% gains.

   The fund's NAV declined by 55% in 2008 following the subprime crisis. This fall was though in line with the major market indices. Since then, the fund has given mediocre returns. The fund's performance in the 2010 bull-run was average, with 13% returns. The BSE 100 gained 16% that year.

For a fund with a size as large as 6,000 crore, SBI Magnum Taxgain's portfolio is well diversified to incorporate an average of about 60 stocks across sectors. While the fund has a multi-cap approach, it is clearly biased towards large-cap stocks. Nearly 70% of its equity portfolio is invested in the large caps. Some of the prominent largecap stocks that the fund has been invested in for more than three years are Bhel, M&M, ONGC, SBI, TCS, L&T and JP Associates.

   For the sectoral allocation, the fund has a reasonable exposure in healthcare and FMCG sectors, with an exposure of 10% and 7%, respectively. Some of the stocks like Cadila, Nestle and Lupin had been identified by the fund at an early stage and it has reaped handsome benefits from these investments. However, compared to the benchmark BSE 100, the fund is underweight on the financial sector which was one reason for the fund's underperformance in 2010. Some of the sectors that the fund has recently decreased its exposure include capital good and construction due to an increase in raw material costs in these sectors. It maintains 3% of AUM in cash.

A decent performance history and the growing asset base are enthusing for investors. However, over the past few years, it has developed itself into a defensive investment and therefore, failed to outperform the benchmark returns even when the market was rallying. Untill SBI Magnum Taxgain moves out of its defensive positioning, investors can expect consistent but not outstanding returns.

Invest in SBI Magnum Taxgain Online or Download SBI Magnum Taxgain Application Form Below

Invest in Tax Saver Mutual Funds

Religare Tax Plan

This fund has made its mark in a short period. It provides good downside protection capabilities, accompanied with decent returns during markets rallies. This will reward investors in the long run.

The fund invests across market capitalisation and sectors, utilising a bottom-up approach. With an allocation of over 60 per cent to mid- and small-caps, and a tightly packed portfolio of around 35 stocks, one would have expected the fund to be thrashed in the market downturn of 2008. But its fall of around 50 per cent was six per cent below the category average and five per cent less than the BSE 100, that too without a high cash exposure. Stock picking made all the difference. Of the 38 stocks which appeared for six months or more in the fund's portfolio in 2008, 16 experienced afall lower than the Sensex. The fund's focus on bottom-up selections leads to quality picks. Momentum plays are avoided, which may result in subdued returns during market rallies. 

The fund follows a multi-cap strategy. Although benchmarked against the BSE 100, the base universe is the BSE 200, to which stocks in the CNX Midcap index are added. A few handpicked companies from the BSE Small Cap and BSE PSU indices are also considered. This universe is reviewed every quarter. Aggressive sector bets, too, are not unusual for the fund.

Invest in Religare Tax Plan Online or Download Religare Tax Plan Application Form Below

Invest in Tax Saver Mutual Funds

Fidelity Tax Advantage - Very Good Tax Saving Mutual Fund

This is one of the two tax saving funds (out of 37) fall in the large-cap space. Its highly investors better than its peers during market down turns. Since its launch, of the total of eight quarters in which its category has been in the red, the fund outperformed its peers in all these. On the flip side, one has to deal with middling performance during market run-ups.

The fund has no restrictions in term so market-cap, sector or thematic bias. The focus is on bottom-up stock picking. However, the portfolio isbiasedtowardslarge-capsandclearlytowardsfinancialservices.Thedecision to buy or sell a stock is made on the basis of the fund manager's understanding of the growth outlook, fundamentals and valuations.
 
Fundmanager, Sandeep Kothari goes by the balance sheet more than what the market is chasing. So, not surprisingly 17 of his holdings have been in the portfolio almost since inception. Despite a large-cap bias, the portfolio is highly diversified. A part from Reliance Industries, allocation to a single stock has rarely exceeded six per cent of the portfolio. However, the fund takes numeroussmallbets.InDecember2010,as manyas28stocksaccountedforlessthan one per cent of the funds portfolio. The large-cap bias does not make it a very exciting offering. It does give stability but the concentrated sector bets, could hinder performance if they do not deliver.

Invest in Fidelity Tax Advantage Online or Fidelity Tax Advantage Application Form Below

Invest in Tax Saver Mutual Funds

ICICI Prudential Tax Plan - A Consistent Performer

This is largely a mid-cap oriented fund, though currently half its portfolio of 54 stocks are large-cap stocks. The fund grabbed attention in 2009 by out performing the category by 30 percent, delivering 112 per cent returns. The fund benefited from allocation to pharma, but what propelled the out performance was the high exposure to mid- and small-cap stocks.

The fund has been a patchy performer since inception and has had some great runs as well. For instance it had a good run between 2003 and 2005. But by end 2006, the fund tanked, when it had less than 5 per cent exposure to large-cap stocks, at a time when large-caps were rising. Again, it failed in 2007 when its sector bets failed. The fund was holding 20 per cent in FMCG and healthcare while it remained underweight in metals and energy sectors, in which the respective indices delivered 121 per cent and 115 per cent. The oil and gas stocks were over valued at that time. It did lead to the fund's poor performance in 2007, but it also helped us later.

In 2008, the fund was able to curtail its fall to 56 per cent, by increasing exposure in large-caps. This, was however achieved without resorting to aggressive cash and debt calls. This also helped when markets rallied in 2009. The fund outperformed its peers in each of the four quarters of 2009. The fund restricts exposure to individual stocks at 5 per cent, with the exception to large-cap stocks such as Reliance Industries, Infosys Technologies, Bharti Airtel, and SBI.
 
The fund currently has 15 per cent exposure to financial services and energy sector and with this increase the fund is emerging into a flexi-cap fund from a pure mid- and small-cap fund. Today, large-caps account for half the fund's portfolio. And, though the fund may have periodic underperformances, investor should stay put for the long run to reap the rewards. After all, in the ten-year period ending November 30, 2010, this fund delivered an annualised return of 28 per cent against the 21 per cent delivered by the category.

Invest in ICICI Prudential Tax Plan Online or ICICI Prudential Tax Plan Application Form Below

Invest in Tax Saver Mutual Funds

Canara Robeco Equity Tax Saver

This fund gained a foothold after the Robeco group bought stake in Canbank Mutual Fund. It aims at a balanced portfolio of large- and mid-cap stocks with a growth style of investing. The equity allocation is ranged between 80-100 per cent.

After a good show in 2007, it fell the least in 2008 despite the cash/debt allocation averaging at 11 per cent (peak at 21 per cent). This is well within its investment mandate. It succeeded on investing in the right companies and the fund manager aligned the portfolio to capitalise on domestic demand recovery. This was based on the fiscal stimulus, monetary easing and strength of favourable demographics. 

The scheme rallied in 2009 due to its banking allocation, increased mid-cap exposure and bets on the likes of L&T, BHEL, GAIL, Gujarat State Petronet, HPCL and BPCL. This year, also, it has beaten the category average by a huge margin.

A small asset base helped the scheme take advantage of flexibility to move in and out of sectors/stocks. It buys companies with secular growth opportunities and an objective of staying invested for longer periods of time.

The fund focuses on companies with superior growth. Though it does not shirk smaller fare, the risk-reward profile has led to a large-cap tilt. Excellent performance numbers without undue risk and a compact, diversified portfolio makes it a strong contender.



Invest in Canara Robeco Equity Tax Saver Online or Canara Robeco Equity Tax Saver Application Form Below



Invest in Tax Saver Mutual Funds

Franklin India Tax Shield - Low Risk, Better Returns

Franklin India tax shield is an open ended, ELSS scheme offered by Franklin Templeton mutual fund in India. This scheme is well known for low risk and more than average returns. As this is a tax saver scheme mandatory lock in period is 3 yrs and one can withdraw capital anytime after 3 Years or keep with AMC.
This fund was introduced in April 1999 and Asset under management is just nearer to Rs. 800 Cr.

Portfolio Details of Franklin India Taxshield:

Top 5 sectors in which this fund have highest exposure are:

Sector	% Allocation
Financial	16.55
Energy	15.10
Technology	12.30
Communication	11.85
Automobile	8.50

Top 5 Stock Holdings of this fund: 

Stock	% Allocation
Infosys	8.68
Bharti Airtel	8.11
ICICI bank	6.04
Reliance Industries Ltd	4.92
Grasim Industries	4.00

 Returns offered on Lumpsum Investment:

Rs.1 Lac Invested In Franklin Taxshield	Value as on 30/10/11	Fund Returns (CAGR)	Cateogary Returns
Before 5 Yrs	1,67,823	10.91	6.30
Before  3 Yrs	2,05,225	27.08	23.45
Before 2 Yrs	1,30,000	14.02	9.02
Before 1 Yr	95090	-4.91	-13.80

 SIP Returns of the fund:

Rs.3000 pm Invested In Franklin Taxshield	Value as on 30/10/11	Fund Returns (CAGR)
Before 5 Yrs	2,47,995	12.77
Before  3 Yrs	1,41,884	18.53
Before 2 Yrs	76,725	6.23
Before 1 Yr	35,870	-0.36

Important thing for ELSS scheme is that being equity oriented maturity amount is tax free in the hands of investors. So anyone in higher tax bracket have a great advantage of it..so if you are looking to save some tax u/s 80c do not forget to think about this plan.

Invest in Franklin India Tax Shield Online or Franklin India Tax Shield Application Form Below

Invest in Tax Saver Mutual Funds

List of Tax Saving Mutual Funds Available

Below is the List of Tax Saving Mutual Funds available:  

1. Axis Tax Saver Fund
2. Bharti AXA Tax Advantage Fund
3. Birla Sun Life Tax Plan
4. Birla Sun Life Tax Relief ‘96
5. BNP Paribas Tax Advantage Plan
6. Canara Robeco Equity Tax Saver
7. DWS Tax Saving Fund
8. DSP BlackRock Tax Saver Fund
9. Edelweiss ELSS Fund
10. Fidelity Tax Advantage Fund
11. Franklin India TaxShield
12. HDFC Long Term Advantage Fund 
13. HDFC TaxSaver
14. HSBC Tax Saver Equity Fund
15. ICICI Prudential Tax Plan
16. IDFC Tax Advantage (ELSS) Fund
17. ING Tax Savings Fund
18. JM Tax Gain Fund
19. JPMorgan India Tax Advantage Fund
20. L&T Tax Saver Fund
21. LIC NOMURA MF Tax Plan
22. Principal Personal Tax Saver Fund
23. Principal Tax Savings Fund
24. Reliance Tax Saver (ELSS) Fund
25. Religare Tax Plan
26. Sahara Tax Gain Fund
27. Magnum Tax Gain Scheme 1993
28. Sundaram Tax Saver
29. Tata Tax Saving Fund
30. Taurus Tax Shield

Invest in Tax Saver Mutual Funds

HDFC Tax Saver Fund - Best Performing Tax Saving Mutual Fund

The HDFC Tax Saver Fund launched in March 1996 under the erstwhile Zurich India Mutual Fund umbrella of schemes, has a corpus of Rs 2,789 crore as of December. Investments in it are eligible for deduction (up to Rs1 lakh) under Section 80 C of the Income Tax Act. It should be noted however that according to the New Direct Tax Code, fresh investments made in ELSS may not be eligible for deduction under Section 80C after April 1, 2012.

The fund has remained in the top 30 percentile (Crisil Mutual Fund Rank 1 and Crisil Mutual Fund Rank 2) for seven consecutive quarters.

Performance In absolute terms, an investment of Rs 1,000 in the fund at the time of its launch in March 1996 would have growth to Rs 17,940 as of February 9, 2011 vis-àvis its peer set and benchmark (S&P CNX 500) which would have appreciated to Rs 9,057 and Rs 4,874 respectively during the same period.
The fund's two-year return in terms of a compounded annual growth rate is 51 per cent vis-à-vis 39 per cent and 37 per cent by the peers and benchmark. Even on a one-year, threeyear and five-year basis, the fund has been able to outperform both the peers and benchmark.

Risk The fund has demonstrated its performance over the last five years with lower volatility vis-à-vis its peer set and benchmark index. The superior performance coupled with lower risk is an indicator of better riskreturn rewards.

Diversified portfolio The fund is highly diversified in its exposure per stock. The fund's portfolio held an average 50 stocks in a three-year period. In industry concentration, it is highly concentrated amongst few sectors. The exposure to the top three sectors over three years amounts to nearly 44 per cent.
Investment style HDFC Tax Saver Advantage Fund's average equity exposure over the last three years is close to 94 per cent while cash and cash equivalents has been less than 5 per cent. The fund's churning over the last one year has been amongst the lowest in the category. 

Over the last three years, financial services have been the most preferred sector for the fund with an average exposure of around 22 percent over this period. The fund has been overweight in this sector vis-à-vis the benchmark. Pharmaceuticals and industrial manufacturing followed with an average exposure of 12 and ten percent respectively. The fund has also been overweight in both these sectors vis-à-vis the benchmark. The fund has been underweight in energy, metals and telecom over the last three years. 

Invest in HDFC Tax Saver Fund Online or HDFC Tax Saver Fund Application Form Below

Invest in Tax Saver Mutual Funds

Union KBC Taxsaver - A New Tax Saving Mutual Fund

Union KBC Mutual Fund has launched the Union KBC Taxsaver, an equity linked savings scheme (ELSS). This is the second offering from the fund house in equity funds space.
The scheme is an open-ended scheme that aims to generate income and longterm capital appreciation by investing in a portfolio of equity and equity-related securities. Under section 80C of the Income-Tax Act, investors can claim tax deductions on investments up to . 1 lakh in the scheme. The investments in this scheme are locked in for three years from the date of allotment of units.

The fund can invest 80% to 100%of the money in equity and equity-related instruments and up to 20% in debt and money market instruments. The investment team shall follow an active strategy to manage the assets of the fund keeping in mind the composition and performance of the benchmark. The BSE 100, a fairly diversified index, will be the benchmark for the scheme.

Ashish Ranawade will be the fund manager. A combination of bottom-up and top-down approaches will be used while making investments for the scheme. The minimum investment in the scheme is . 500 and in multiples of Rs 500. It also offers the systematic investment plan option. There is no entry load or exit load. First-time mutual fund investors investing more than Rs 10,000 will be charged Rs 150 towards transaction cost. Investments of over Rs 10,000 will also attract a transaction charge of Rs 100. You can choose between the growth and dividend options. The NFO closes on December 16 and the scheme will re-open for investment on December 23.
You can consider them scheme if you are looking to invest in equities with a long-term view and want capital appreciation along with tax-savings.

The scheme invests in equities and that adds to the risk of an investor's portfolio. The scheme invests in equities and that adds to the risk in investor's portfolio. Also, there are other taxes saving schemes with proven track record.

Invest in Tax Saver Mutual Funds

Tax Saver Mutual Funds Online

aka Equity Linked Savings Schemes (ELSS). Get tax benefit for investing upto Rs 1,00,000 in ELSS Mutual Funds under section 80C. Here is the list of all Tax saving mutual funds offered by various AMCs. All of them allow purchase through applications and quite a few of them allow online purchase of mutual fund units.

Invest in Tax Saver Mutual Funds

Below is the List of Tax Saving Mutual Funds available:  

1. Axis Tax Saver Fund
2. Bharti AXA Tax Advantage Fund
3. Birla Sun Life Tax Plan
4. Birla Sun Life Tax Relief ‘96
5. BNP Paribas Tax Advantage Plan
6. Canara Robeco Equity Tax Saver
7. DWS Tax Saving Fund
8. DSP BlackRock Tax Saver Fund
9. Edelweiss ELSS Fund
10. Fidelity Tax Advantage Fund
11. Franklin India TaxShield
12. HDFC Long Term Advantage Fund 
13. HDFC TaxSaver
14. HSBC Tax Saver Equity Fund
15. ICICI Prudential Tax Plan
16. IDFC Tax Advantage (ELSS) Fund
17. ING Tax Savings Fund
18. JM Tax Gain Fund
19. JPMorgan India Tax Advantage Fund
20. L&T Tax Saver Fund
21. LIC NOMURA MF Tax Plan
22. Principal Personal Tax Saver Fund
23. Principal Tax Savings Fund
24. Reliance Tax Saver (ELSS) Fund
25. Religare Tax Plan
26. Sahara Tax Gain Fund
27. Magnum Tax Gain Scheme 1993
28. Sundaram Tax Saver
29. Tata Tax Saving Fund
30. Taurus Tax Shield

Invest in Tax Saver Mutual Funds