Skip to main content

L&T Tax Saver Fund

Invest Mutual Funds Online

Download Mutual Fund Application Forms

Call 0 94 8300 8300 (India)

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 it also provides an opportunity to create wealth in one's tax-saving portfolio. Moreover, the lock-in period of 3 years encourages long-term investing, which is a pre-requisite for fruitful return on equity investments. A well managed tax-saving fund 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.

L&T Tax Saver Fund (LTSF) is one such open-ended tax saving fund from the stable of L&T Mutual Fund. LTSF is primarily mandated to invest in equities and equity-related securities along with debt and money market instruments. Launched in November 2005, the fund has been in existence for a little over 6 years now.

Investment Objective and Proposition

The fund's primary investment objective is "to provide long term capital appreciation by investing predominantly in equity and equity related instruments and also enabling investors to get income tax rebate as per the prevailing Tax Laws and subject to applicable conditions."

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, LTSF's exposure to large cap stocks has been in the range of 71% - 89%, while its exposure to mid & small cap stocks has ranged from of 7% - 26%. The fund's exposure to debt and cash over the past one year has never been more than 7% which indicates its tilt towards staying invested in equities. As per the portfolio disclosed on January 31, 2012, fund has allocated 88.8% towards large caps, a petite 7.4% in mid & small cap and has preferred to hold cash to extent of 3.8% of its total portfolio.

Equity Portfolio

Holdings

Sep 2011

Oct 2011

Nov 2011

Dec 2011

Jan 2012

Infosys Ltd.

4.6

6.8

6.7

5.2

7.6

Reliance Industries Ltd.

6.5

5.7

5.5

3.8

7.5

ICICI Bank Ltd.

4.5

7.6

6.4

6.0

6.1

State Bank Of India

0.9

0.9

0.9

2.7

5.3

HDFC Bank Ltd.

4.0

3.0

3.0

3.0

5.0

Larsen & Toubro Ltd.

1.9

1.9

1.9

1.5

4.0

HDFC Ltd.

4.8

5.5

5.6

5.9

3.7

Tata Consultancy Services Ltd.

5.9

3.4

3.7

4.1

3.7

ITC Ltd.

4.0

6.1

6.3

6.6

3.6

Hindustan Unilever Ltd.

-

-

-

-

3.3

 

As indicated by the table above, LTSF's top-10 equity portfolio constitutes of all 'A' group stocks. As on January 31, 2012 the fund held in all 40 stocks in its portfolio, out of which 'A' group stocks accounted for 99.9% and the rest 0.1% were the 'B' group ones (namely Entertainment Network India Ltd. and Ipca Laboratories Ltd.). The fund holds a portfolio which is diversified across sectors and across stocks within the sector. Top-10 stocks account for 49.7% of the portfolio while Top-5 sector concentration stands at 45.2%. However a noteworthy point is that, despite being benchmarked against S&P CNX Nifty, LTSF has churned its portfolio very often as revealed by its portfolio turnover ratio of 2.19 times.

LTSF 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, LTSF follows a combination of top-down as well as bottom-up approach for its stock selection. However in order to select a particular stock as well as to determine it potential value, the fund house is guided by one or more of the following considerations:

 

·         Financial strength of the companies (as recognised by financial parameters)

·         Reputation of the management and their track record

·         Brand building strategy followed by companies for their product and services

·         Companies that are relatively less prone to recessions or cycles, either because of the nature of their businesses or superior strategies followed by their management

·         Market liquidity of stock

How LTSF has fared vis-à-vis its peers

Scheme Name

6-Mth (%)

1-Yr (%)

3-Yr (%)

5-Yr (%)

Std. Dev. (%)

Sharpe Ratio

HDFC TaxSaver (G)

1.2

-0.7

36.9

11.7

7.05

0.31

ING Tax Savings (G)

-3.1

-5.2

34.6

2.6

7.83

0.27

Sahara Tax Gain (G)

0.7

2.5

33.7

14.3

7.78

0.27

Religare Tax Plan (G)

-2.2

1.4

32.9

14.1

6.55

0.29

DSPBR Tax Saver (G)

1.0

-3.3

30.4

11.3

7.31

0.25

L&T Tax Saver (G)

-2.7

-8.8

29.5

2.98

8.64

0.21

S&P CNX Nifty

1.9

-4.4

25.8

7.5

7.67

0.20

 

The table above reveals that over a 3-Yr time frame the fund has clocked a 29.5% CAGR, which is higher than the CAGR returns of 25.8% generated by S&P CNX Nifty. But LTSF's performance has not been very luring when compared to top performers in the category. When assessed on the volatility front, LTSF as compared to its category peers, has exposed its investor to higher risk (as revealed by its Standard Deviation of 8.64%), and at the same time has generated ordinary risk-adjusted returns (as revealed by its Sharpe Ratio of 0.21) for its investors.

Fund Manager Profile

Name of the Fund Manager

Mr Anant Deep Katare

Total Work Experience

Over 14 years

Managing the fund since

Oct-07

Qualifications

B.E. (Electrical), PGDBA, CFA

As seen above the performance of L&T Tax Saver fund is nothing to vie to for – it is ordinary. The return of 29.5% CAGR over a 3-Yr time period may look attractive on standalone basis but its comparison with the category peers shows that L & T Tax Saver is a laggard. Hence we recommend investors to avoid L & T Tax saver.

Although investment in ELSS helps you avail the tax benefits; it is not risk free. It requires your attention at the time of selecting a fund. Investment done without proper assessment may prove to be a blunder if your selection goes wrong. Thorough research of available options may help you take a well informed decision

Call 0 94 8300 8300 (India)

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

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

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

LIC Leave Encashment Plan

LIC Leave Encashment Plan       Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms fro

Tax Slabs 2012

Slab 1 Upto Rs 1.6 Lacs Tax Rate NIL for Men; Upto Rs 1.9 Lacs Tax Rate NIL for Women; Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen; Slab 2 Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10% Slab 3 Rs 5 Lacs to Rs 8 Lacs Tax Rate 20% Slab 4 Rs 8 Lacs onwards Tax Rate 30%   --------------------------------------------- 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 ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 R

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage

Modern day balanced mutual fund approach

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India)   In reality, most balanced funds have a strong tilt towards equity instead of a mix of equity and debt THERE are various types of mutual funds available to investors with specific features. Often investors have a particular idea about a specific type of funds in terms of their features and risks, but that is not what is actually available. Therefore, it is necessary for an investor to understand the actual position before picking up a fund. This requires some work on the part of the investor. One example can be the situation with balanced funds. Name is not representative: One of the first things that an investor has to understand is that the name of the fund is often not representative of its investment pattern. The name often represents only the aim of the fund, and not what it actually is.
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