GEM GAZE

August 2020

The consistent performance of all five funds in the November 2019 GEMGAZE is reflected in the five funds holding on to their esteemed position of GEM in the August 2020 GEMGAZE.

Birla Sun Life Tax Relief 96 Gem

Consistent Outperformer

Launched in March1996, the Rs. 10,101 crore Birla Sun Life Tax Relief 96 is one of the oldest ELSS funds in the industry. Currently, large caps account for 45.55% of the portfolio, with a 44.46% allocation to small and mid-cap stocks. This tax-saving fund is market cap neutral, with no bias towards any particular section of the market. With 38 stocks and the top 5 holdings accounting for 41.47%, the fund looks well-diversified. The fund invests 58.36% in the top three sectors, i.e., healthcare, finance and energy. The funds’ approach is aggressive, as the fund manager takes large positions in its top bets, most of which are on stocks outside the benchmark index. The focus remains on companies boasting superior quality—with ability to sustain competitive advantages over longer periods. The fund has been a consistent outperformer over the years and has managed to give a very impressive return of 22.66%. In the past one year, 5 years and 10 years, the fund has earned returns of 6.6%, 5.81% and 9.98% respectively as against the category average of 4.19%, 4.79% and 9.28% respectively. The fund is benchmarked against the S&P BSE 200 TRI. The expense ratio is 1.92% and turnover ratio is 4%. The fund is managed by Mr. Ajay Garg since October 2006.

Franklin India Taxshield Fund Gem

Proven track record

Launched in April 1999, the Rs.3,310 crore Franklin India Taxshield Fund is one of the oldest ELSS funds in the industry with a proven track record in bull and bear phases. An established fund in the ELSS category, known for its consistency of returns and an ability to contain downside, it has religiously maintained a large-cap bias amid different market phases, with large caps accounting for 74.26% of the portfolio at present. The most distinctive feature of the fund is that it follows a bottom-up investment strategy and always stays fully-invested. With 52 stocks and the top 5 holdings accounting for 34.61%, the fund looks well diversified. The fund invests 55.62% in the top three sectors, i.e. finance, energy and technology. The fund has given returns of around 20% since inception. In the past one year, five years and ten years the fund has earned returns of -6.89%, 1.89% and 9.45% respectively as against the category average of 3.95%, 4.73% and 9.18% respectively. The fund's returns in the last one year show a slowdown relative to the category. The fund's year-to-year returns do not always beat its more aggressive peers, but its performance adds up to very handsome returns over the long term. The winding up of six of its debt funds has lowered the morale of investors. The fund is benchmarked against NIFTY 500 TRI. The expense ratio is 1.98% and turnover ratio is 26.99%. The fund is managed by Mr. R. Janakiraman and Mr. Lakshmikanth Reddy since May 2016.

ICICI Prudential Long-term Equity Fund Gem

Reasonable valuation and growth expectations

At Rs. 5,970 crore, ICICI Prudential Long-term Equity Fund, launched in August 1999, is one of the largest ELSS funds in the industry. Currently, large caps account for 74.95% of the portfolio. With 64 stocks and the top 5 holdings accounting for 30.77%, the fund looks well diversified. The fund invests 49.81% in the top three sectors, i.e. finance, energy and technology. The fund is valuation-focused and the portfolio is constructed around stocks across sectors and market-capitalisation ranges, based on and reasonable valuation and growth expectations. Expensive stocks which cannot be explained by valuation tools are avoided. The fund has earned a return of 18.55% since the fund’s inception. In the past one year, five years and ten years, the fund has earned returns of -0.76%, 4.93% and 9.92% respectively as against the category average of 3.56%, 4.86% and 9.27% respectively. The fund is benchmarked against NIFTY 500 TRI. The expense ratio is 2.08% and turnover ratio is 45%. The fund is managed by Mr. Harish Bihani since November 2018.

Invesco India Tax Plan Gem

Quality conscious conservative fund

Incorporated in December 2006, Invesco India Tax Plan, with a corpus size of Rs. 1075 crore, is one of the smallest schemes in its category, but it packs in quite a punch. The fund invests across market capitalisation and sectors and spreads its assets over 38 stocks without being overly diversified and the top 5 holdings constitute 38.04%. 51.88% of the assets are invested in the top three sectors, finance, energy and technology. Even though the fund currently has a large cap bias with 70.4% allocation, it has not been hesitant about being heavily invested in mid and small cap companies. In the past too, the mid-cap and small-cap allocation have been high. Its relatively small size makes an effective mid-cap strategy viable. Designed to own some of the best large-cap and mid-cap ideas of the fund house, the fund prefers quality businesses with healthy growth. But it is careful about not going overboard on valuations. The fund's recent large-cap tilt may help contain downside in the event of a market correction. The fund has delivered 12.83% returns since inception. The one-year, five year and ten year returns are 8.35%, 6.86% and 11.5% respectively as against the category average of 4.47%, 4.95% and 9.3% respectively. The fund is a good choice for investors who are looking for a conservative approach to tax planning. Despite its relatively short history, the fund has consistently delivered returns for the investors. Stock picking has been the key for success of this fund. The fund is benchmarked against the S&P BSE 200 TRI. The expense ratio is 2.41% and the portfolio turnover ratio is 103%. The fund is managed by Mr. Dhimant Kothari since March 2018.

DSP Tax Saver Fund Gem

Growth-oriented outperformance

Launched in January 2007, DSPBR Tax Saver Fund has a fund corpus of around Rs 6083 crore.  Though multi-cap by mandate, the fund has been quite large-cap oriented in the last five years. Typically, 65 to 75% of the portfolio has been in large-caps and 20 to 25% in mid-caps. It has a growth-oriented multi cap portfolio with 66.48% of the corpus in large cap stocks at present. There are 61 stocks in the portfolio. The top 5 holdings constitute 31.86%. 48.11% of the assets are invested in the top three sectors, finance, energy and healthcare. DSP BR Tax Saver fund has offered 12.2% returns since inception. In the last one year, five years, and ten years, the fund has earned returns of 3.79%, 6.87% and 10.69% respectively as against the category average of 4.47%, 4.95% and 9.3% respectively. The fund is benchmarked against NIFTY 500 TRI. The expense ratio is 1.9% and the portfolio turnover ratio is 148%. The fund is managed by Mr. Rohit Singhania since July 2015.