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It's pretty much as safe as you can get when opting for an equity fund with a tax benefit. The fund portrays itself as one that will not excite during bull runs but will certainly not crumble like a pack of cards. Since its launch, of the total 11 quarters in which the category has been in the red, the fund has curtailed its fall to a lower level than the average in 10 of them. Come 2010 and the fund proved that it was no bear market bellwether. Out of 37 funds, it was the second best performer.

 

When Kothari analyses a stock, he makes his call based on its fundamentals, valuations and his understanding of the growth outlook. Even if the stock is having a great run, he may not hop onto that wagon. Metals, for instance, had a great run in 2007 and 2009 while his exposure was limited to around 5 per cent. But Kothari is quick to point out that he has nothing against any sector per se. "The fund is a go-anywhere fund with no market cap, sector or style bias. This means that the fund can look for the best ideas and invest in them irrespective of the market environment." Agreed, but there is no denying the strong bent towards Financial Services. He views it as a proxy to the overall growth in the economy since India has a low penetration of financial services and the potential to grow and compound returns over the long-term are enticing.

 

Kothari is a bottom-up stock picker who tries to avoid making short-term trading calls. "We aim to outperform our benchmark by looking for alpha regardless of market conditions. We take into account many factors: Understanding of the business, how it makes money, opportunity, scalability, competitive advantage, franchise value, growth potential, upside, execution track record, is it the lowest cost producer, do we trust the management? We then see what we are willing to pay for that stock," he says.

 

The portfolio construction does give the impression that the fund manager appears to err on the side of caution. Along with a large-cap bias, the portfolio is extremely well diversified. The number of stocks has averaged around 65 (over the past year) with allocation to the top five averaging around 24 per cent. Apart from Reliance Industries, allocation to a single stock has rarely exceeded 6 per cent and numerous stocks have an exposure of less than 1 per cent.

When smaller stocks rally, this large-cap dominated portfolio could get left behind. Also, should Financial Services' stocks get beaten down, this fund could lag behind its peers.

 
 
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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

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