Canara Robeco Taxsaver has made a strong comeback from the wilderness with a new identity and has emerged as a strong competitor to some of the well-established diversified equity schemes in the tax saving category
LAUNCHED in March 1993, Canara Robeco Taxsaver is one of the oldest, yet one of the smallest tax savings (ELSS) schemes in the country today with assets under management of just about Rs 80 crore. Known as Canequity Taxsaver earlier, this fund has seen a big turnaround in performance after its foreign partner – Robeco Groep NV of Netherlands, acquired 49% stake in the erstwhile Canbank asset management.
PERFORMANCE
In its 17 year long performance history, Canara Robeco Taxsaver has been just about an average performer until 2008. Barring the two block-buster years of 1998 and 1999, when the fund had raced way ahead of its benchmark index, the BSE 100, as well as the broader market indices – the Sensex and the Nifty, this fund had in fact failed to garner any investor interest.
No surprises here that the fund’s assets under management (AUM) have remained below Rs 100 crore even after being in business for nearly two decades. However, the manner in which this fund has restrategized itself over the last two years, has left many of its peers spellbound.
In 2008, year of the market meltdown, a change in fund’s management was well accomplished by the fund’s ability to cushion its fall much better than the market, as well as, its peers. The fund returned about - 47% against BSE 100’s -55%. The Sensex and the Nifty returned about -52% each in that year, while the average of the category of tax saving schemes stood at about -56%.Having tasted success after a fairly long interval, Canara Robeco Taxsaver continued its winning steak in 2009 as well. It returned over 89% gains against the Sensex and the Nifty’s 81% and 76% returns, respectively. The average returns of the ELSS category stood at about 82% then.
PORTFOLIO
From being a heavy weight in energy, construction and metals until mid of 2008, the fund has since diverted its synergies towards financial services, telecom, energy and pharma.
Well-diversified to incorporate about 35-40 stocks at any given point in time, traditionally the fund has a bias in favour of largecap stocks. It is also interesting to see the fund churning its portfolio on regular intervals, occasionally moving in and out of even some of the largest blue-chip stocks in the industry.
For instance, it booked profits in L&T and exited it completely in May last year after holding it for over two years. Similarly, it has been moving in and out of RIL at close intervals. But at the same time, it has held onto stocks like Bharti Airtel for over two years now.
It has been interesting to see some of the Canara Robeco Taxsaver’s recent picks that are less than a year old, nearly doubled today since they were bought last year. These include Cadila Helathcare, Torrent Pharma and Jubilant Organosys – clearly justifying fund’s affinity to this space of late, while BHEL, BPCL, Oracle Financial Services and Tulip Telecom being the others.
On the other hand stocks like Piramal Life Sciences, ABG Infralogistics and Allied Digital Services that the fund has been holding since mid-2008, have turned out to be laggards in an otherwise decent portfolio.
OUR VIEW
Given the fund’s performance in the recent past, which includes a stint in both the bearish and the bullish phases of the market, Canara Robeco Taxsaver has clearly proven to be a worthwhile ELSS investment.
However, having said that, it is also important to note that the fund’s turnaround has been clearly steered by the new management, including the new fund manager. The fund can thus be described as a worthy competitor to some of the well-established equity linked tax savings schemes.
LAUNCHED in March 1993, Canara Robeco Taxsaver is one of the oldest, yet one of the smallest tax savings (ELSS) schemes in the country today with assets under management of just about Rs 80 crore. Known as Canequity Taxsaver earlier, this fund has seen a big turnaround in performance after its foreign partner – Robeco Groep NV of Netherlands, acquired 49% stake in the erstwhile Canbank asset management.
PERFORMANCE
In its 17 year long performance history, Canara Robeco Taxsaver has been just about an average performer until 2008. Barring the two block-buster years of 1998 and 1999, when the fund had raced way ahead of its benchmark index, the BSE 100, as well as the broader market indices – the Sensex and the Nifty, this fund had in fact failed to garner any investor interest.
No surprises here that the fund’s assets under management (AUM) have remained below Rs 100 crore even after being in business for nearly two decades. However, the manner in which this fund has restrategized itself over the last two years, has left many of its peers spellbound.
In 2008, year of the market meltdown, a change in fund’s management was well accomplished by the fund’s ability to cushion its fall much better than the market, as well as, its peers. The fund returned about - 47% against BSE 100’s -55%. The Sensex and the Nifty returned about -52% each in that year, while the average of the category of tax saving schemes stood at about -56%.Having tasted success after a fairly long interval, Canara Robeco Taxsaver continued its winning steak in 2009 as well. It returned over 89% gains against the Sensex and the Nifty’s 81% and 76% returns, respectively. The average returns of the ELSS category stood at about 82% then.
PORTFOLIO
From being a heavy weight in energy, construction and metals until mid of 2008, the fund has since diverted its synergies towards financial services, telecom, energy and pharma.
Well-diversified to incorporate about 35-40 stocks at any given point in time, traditionally the fund has a bias in favour of largecap stocks. It is also interesting to see the fund churning its portfolio on regular intervals, occasionally moving in and out of even some of the largest blue-chip stocks in the industry.
For instance, it booked profits in L&T and exited it completely in May last year after holding it for over two years. Similarly, it has been moving in and out of RIL at close intervals. But at the same time, it has held onto stocks like Bharti Airtel for over two years now.
It has been interesting to see some of the Canara Robeco Taxsaver’s recent picks that are less than a year old, nearly doubled today since they were bought last year. These include Cadila Helathcare, Torrent Pharma and Jubilant Organosys – clearly justifying fund’s affinity to this space of late, while BHEL, BPCL, Oracle Financial Services and Tulip Telecom being the others.
On the other hand stocks like Piramal Life Sciences, ABG Infralogistics and Allied Digital Services that the fund has been holding since mid-2008, have turned out to be laggards in an otherwise decent portfolio.
OUR VIEW
Given the fund’s performance in the recent past, which includes a stint in both the bearish and the bullish phases of the market, Canara Robeco Taxsaver has clearly proven to be a worthwhile ELSS investment.
However, having said that, it is also important to note that the fund’s turnaround has been clearly steered by the new management, including the new fund manager. The fund can thus be described as a worthy competitor to some of the well-established equity linked tax savings schemes.
