Canara Robeco Equity Tax Saver, in existence since September 1998, is a diversified equity fund, with its portfolio spread across capitalisations. Managed by Anand Shah (head – equities) since September 2008, it managed assets aggregating Rs 185 crore as on June. The fund has been ranked CRISIL~CPR 1 in the latest ranking for the quarter ended March, under the ELSS (Equity-Linked Savings Scheme) category. Further, the fund has been in the topmost cluster in five of the past nine quarters.
Performance It has performed better than its peers and benchmark index (BSE 100) across various time periods (see performance chart). However, its performance was choppy in the first few years since its inception. Hence, from then, the outperformance has been lower at 52 per cent. During the latest five-year period, though, it outperformed its benchmark index on almost 70 per cent of occasions in terms of one-year returns calculated every month (including the latest 22 months of consecutive outperformance). The fund also capitalised on the rebound of 2009, appreciating by 141 per cent from February 2009 till date, compared to 106 per cent of the benchmark index.
If one had invested Rs 1,000 at the inception of the scheme (September 1998), the initial capital would have grown almost nine times to Rs 8,959 visà-vis Rs 6,922 in the benchmark index, indicating a compounded annual growth rate of 20 per cent for the scheme and 18 per cent for the benchmark index.
Similarly, if one had invested in the fund through a systematic investment plan (SIP) for three years (coinciding with the lock-in period for ELSS), the invested capital would have grown at 31 per cent vis-a-vis 16 per cent in the benchmark index.
The scheme's performance on risk-adjusted return, relative to its peers, is high and a key factors for propelling its performance to CRISIL~CPR 1. The fund has a Sharpe ratio (risk-adjusted returns above arisk-free rate) of 1.42, considerably higher than that of its peer average (0.94) and benchmark index (0.60). The CRISIL~CPR ranking methodology assigns highest weightage to risk-adjusted performance measured by superior returns score (SRS), as it underscores a fund's ability to post higher returns with lower volatility relative to its peers.
Portfolio analysis The fund maintains a fairly diversified portfolio across market capitalisations. On an average, the fund has maintained investments in 38 stocks across 20 sectors over a three-year period.
It follows an aggressive investment style, demonstrated from the high level of churning in the portfolio. The fund also takes active cash calls and goes high on cash, based on the fund manager's view on the market. Over the past three years, the fund's investment in equity has moved between 78 per cent and 96 per cent. During this period, telecom services, banks and refineries accounted for around 31 per cent of its portfolio. The fund has considerably increased its exposure to banks, with almost a quarter of the portfolio exposed to the sector over the past one year, compared to less than 20 per cent in the yearago period.
A two-year analysis of the portfolio indicates banks, pharmaceutical and media & entertainment companies contributed the most to overall portfolio gains. Prominent stock performers were HDFC Bank, Bank of Baroda, Sun TV Network, Axis Bank, IndusInd Bank, SBI and Torrent Pharmaceuticals.
