Which are the best tax saving mutual funds in India for 2012 where you should invest your money ? Note that tax saving mutual funds are also called ELSS (Equity Linked Saving Schemes). So we are gunning for the best performing ELSS mutual funds to invest your money in India in 2012.
A small caveat. The fate of tax savers is not yet known post the Direct Tax Code (DTC) implementation, so it might be prudent to wait for this budget if you are going to start investing for the first time. For those who are investing in ELSS mutual funds for sometime now, do continue if your requirement is so.
Listing for 2012
Investing your money in such mutual funds offers you double advantage, – you can claim Section 80C deductions and make your money grow via long term investing. Please note that such mutual funds have a lock in period of 3 years.
Without much ado – here goes my list for 2012.
1. Canara Robeco Equity Tax Saver
Launched around 18 years back, Canara Robeco Equity Tax Saver is bench marked against BSE 100.
With a return since launch of around 14.5% and a below average risk grade, this has given decent returns. The fund manager ensures a diversified portfolio with no market cap or sector bias. The fund invests in growth-oriented companies with strong fundamentals.
2. Taurus Tax Shield
As old as Canara Robeco Equity Tax Saver, Taurus Tax Shield is bench marked against BSE 200 and has delivered a consistent returns of approximately 11% since launch. It must be fun for the fund manager to manage a small corpus of Rs 65 crores. The fund manager invests across the market capitalization and sectors. The selection of stocks is made on the basis of long-term business prospects and value creation.
3. Fidelity Tax Advantage
Around 5 years old, as compared to the above two, Fidelity Tax Advantage is a new kid on the block. It is a huge fund in terms of corpus, managing around 1120 crores. Benchmarked against BSE 200, it has delivered around 13% since launch. The fund manager does bottom up picking of stocks based on their core strength of the companies and is not restricted by any market capitalization or sector.
4. Franklin India Taxshield
This 12 year old mutual fund is benchmarked against S&P CNX 500 and manages around 790 crores of fund corpus. The returns since launch are a whopping 26% and it has shown its ability to limit the downside during market falls better than its competitors. That is what has made it stand out.
As above, this fund also follows a bottom up picking strategy and does not limit itself to any market capitalization.
5. Sahara Tax Gain
Around 14 years old, this is a small fund with a corpus of Rs 10 crores. It is benchmarked against BSE 200 and the returns since launch have been around 26%.
It invests around 20% each in mid cap and small cap stocks while the rest goes into large cap. The top 3 sectors account for 45% of its holdings.
6. Religare Tax Gain
With a net assets of around 100 crores, this 6 year old mutual fund has delivered around 10.5% since launch. Benchmarked against BSE 100, it follows the bottom up picking strategy and invests across all market capitalizations.
It picks around 20 to 50 stocks and has a multi cap approach strategy.
7. HDFC LT Advantage and HDFC Taxsaver
HDFC LT Advantage compares itself with the Sensex and manages a corpus of Rs 900 crores while HDFC Taxsaver manages Rs 2880 crores with a benchmark against S&P CNX 500. HDFC Taxsaver has returned around 30% since launch while HDFC LT Advantage has given 25%.
Coming from the stable of HDFC Fund House, these are very good funds that can find a place in your portfolio in 2012.
8. ICICI Prudential Tax Plan
With a return of around 23% since launch, this 12 year old fund manages 1200 crores and is benchmarked against S&P CNX 500. It takes a relatively larger exposure to mid cap and small cap stocks and hence has shown stellar performance in some years while getting the boot in others when the markets fell. There are some 60 stocks in the portfolio with no stock going over 5% in allocation and not sector going over 20%.