Skip to main content

Bharti AXA Tax Advantage Fund

Invest Mutual Funds Online

Download Mutual Fund Application Forms

Bharti AXA Tax Advantage Fund

Tax-saving funds (also referred to as Equity Linked Savings Schemes - ELSS) are well suited for investors willing to take risk. However, at the same time they also provide an opportunity to create wealth. Moreover, the lock-in period of 3 years encourages long-term investing, which is a pre-requisite for fruitful return on equity investments. Well-managed tax-saving funds can serve a dual purpose i.e. provide tax benefits (under Section 80C of the Income Tax Act, 1961) and assist investors' to accumulate wealth over the long-term. But to do so, the key lies in selecting a well-managed tax-saving fund with a long-term horizon.

Bharti AXA Tax Advantage Fund (BATAF) is an open-ended tax saving fund from the stable of Bharti AXA Mutual Fund. BATAF is primarily mandated to invest in equities and equity-related securities along with debt and money market instruments. Launched in February 2009, the fund has been in existence for a little over 3 years now.

 

Investment Objective and Proposition

The fund's investment objective as per its offer document is "to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities across all market capitalisations. The Scheme is in the nature of diversified multi-cap fund. The Scheme may invest in derivatives, if and to the extent permissible under the Regulations and the ELSS Rules, for hedging and portfolio balancing and optimizing returns. However, there can be no assurance that the investment objectives of the Scheme will be realised. The Scheme is not providing any assured or guaranteed returns."

The fund is mandated to invest 80% - 100% of its total assets in equity and equity-related securities and the rest (i.e. upto 20%) in debt and money market instruments to manage its liquidity requirements.

Over the past one year, BATAF's exposure to large cap stocks has been in the range of 71% - 91%, while its exposure to mid & small cap stocks has ranged from of 4% - 24%. The fund's exposure to debt and cash over the past one year has rarely been above 10% which indicates its tilt towards staying invested in equities. As per the portfolio disclosed on February 29, 2012, the fund has allocated 90.0% towards large caps, a petite 4.2% in mid & small cap and has preferred to hold cash to extent of 5.8% of its total portfolio.

 

Equity Portfolio

Holdings

Oct 2011

Nov 2011

Dec 2011

Jan 2012

Feb 2012

Reliance Industries Ltd.

5.5

5.3

4.9

7.8

7.5

Infosys Ltd.`

8.7

8.6

9.7

6.9

7.0

HDFC Bank Ltd.

5.8

5.7

6.1

6.6

6.7

ITC Ltd.

8.4

8.6

9.1

6.5

6.3

ICICI Bank Ltd.

6.9

5.8

5.2

7.1

5.9

Larsen & Toubro Ltd.

2.8

2.7

2.2

4.5

4.5

State Bank Of India

3.4

3.4

3.3

4.1

4.3

Bharti Airtel Ltd.

4.0

4.4

4.0

4.1

4.0

Tata Motors Ltd.

2.9

2.8

3.0

3.7

4.0

Tata Steel Ltd.

1.4

0.8

0.7

2.4

2.4

 

The fund holds a fairly diversified portfolio of 49 stocks. Top 10 stocks account for 52.4% while allocation to Top 5 sectors has been 46.4% as per the portfolio disclosed on February 29, 2012. The fund manager has moderately churned the portfolio which is revealed by the portfolio turnover ratio of 1.12 times. BATAF is benchmarked against S&P CNX Nifty

BATAF follows a multi-cap style as it endeavours to generate superior return by investing in equity and equity related instruments across the market capitalizations. Moreover to build its portfolio, BATAF follows a top-down approach and looks into the following points for identifying potential themes and stocks:

·         Global and Indian economic scenario

·         Domestic policy environment

·         Stock valuations

However for the final stock selection process, BATAF follows the bottom-up approach, along with a qualitative framework of MVPS (Macro, Valuation, Policy and Sentiment) for its asset allocation.

 

How BATAF has fared vis-à-vis its peers

Scheme Name

6-Mth (%)

1-Yr (%)

3-Yr (%)

5-Yr (%)

Std. Dev. (%)

Sharpe Ratio

Canara Robeco Equity Tax Saver(D)

4.2

5.7

38.9

16.1

7.49

0.31

HDFC TaxSaver (G)

5.5

2.5

36.8

11.7

7.00

0.32

ING Tax Savings (G)

0.3

-2.0

34.2

2.6

7.78

0.27

Sahara Tax Gain (G)

4.1

6.1

33.8

14.59

7.74

0.27

Bharti AXA Tax Adv (G)

2.8

-0.6

30.2

-

9.08

0.22

S&P CNX Nifty

6.0

-1.3

25.5

8.1

7.63

0.20

 

The table above reveals that BATAF has displayed a satisfying performance in the last 3 years by delivering a 30.2% CAGR, and has outperformed its benchmark index by a considerable margin. The fund was launched when Indian equity markets were bottoming out. This seems to have given BATAF the advantage of buying equities at attractive valuations.

However, when assessed on the volatility front, BATAF as compared to its category peers, has exposed its investor to high risk (as revealed by its Standard Deviation of 9.08%), and at the same time, has generated average risk-adjusted returns (as revealed by its Sharpe Ratio of 0.22) for its investors. This thus makes BATAF a high risk-average return investment proposition.

Fund Manager Profile

Name of the Fund Manager

Mr. Gaurav Kapur

Total Work Experience

Over 6 years

Managing the fund since

Mar-11

Qualifications

CFA, CA, MBA from IIFT

As seen above, Bharti AXA Tax Advantage Fund has been able to deliver satisfying performance only by the virtue of it being launched when the Indian equity markets were nearing the bottom during February 2009 (which enabled the fund manager to build the fund's portfolio at attractive valuations). The performance of BATAF looks pretty average when compared to that of some of its category peers. Moreover, the concentrated top-10 stock portfolio and top-5 sector portfolio makes BATAF vulnerable to greater risk.

Given that the fund has generated average risk adjusted returns despite having been launched during the bear market phase; we recommend you to redeem BATAF if you have a low to moderate risk appetite.

A tax saving fund can be a wealth creator provided you are selective about your options. Investment done at eleventh hour can prove to be hazardous as you tend to invest with a sole motive of tax saving and chances are greater that you may commit a mistake while zeroing on the fund. You may be better off by investing in a fund which has a proven track record of performance across market cycles and which comes from a fund house that follows systems and processes

-------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

 

Best Performing Mutual Funds

    1. Largecap Funds:
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    3. Mid and SmallCap Funds
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    4. Small and MicroCap Funds
      1. DSP BlackRock MicroCap Fund
    5. Sector Funds
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    6. Gold Mutual Funds
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now