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With the financial year drawing to a close, investors seeking to save tax at the eleventh hour can consider equity-linked saving schemes (ELSS). If you have not exhausted the Section 80 C limit yet, you can consider investing in Mirae Asset Tax Saver, an ELSS fund with a three-year lock-in period.
The scheme was launched in December 2015 and hence has a relatively short track record of performance. The fund is benchmarked against S&P BSE 200. Since its launch, the scheme has clocked 18.98 per cent returns (CAGR).
Over the past three-year period, the fund has delivered an annual return of 22.3 per cent, outperforming the category average return of 14.5 per cent and its benchmark return of 16.5 per cent by a huge margin.
Performance & portfolio
Following a category-beating performance in 2016 and 2017, the fund also managed to contain the downside well in the lacklustre 2018 market. While the ELLS category on an average delivered a negative return of about 6 per cent, Mirae Asset Tax Saver delivered a negative return of 2.3 per cent, thus capping its downside. The scheme is among the top quartile of funds in the ELSS category.
Since May 2017, the fund has been fully investing in equities. Banking has been the top preferred sector choice since inception, with about 26 per cent allocation currently. Over the past year, the fund has slightly increased its allocation to the software, petroleum products and pharma sectors, while marginally trimming its exposure to consumer non-durables and construction projects. Good performance by banking and software stocks have boosted the scheme’s returns over the past year. Recently, it added power and industrial capital goods sectors to its portfolio.
The fund holds 57 stocks in its kitty and is predominately biased towards large-cap, growth-oriented stocks. It also has exposure in the mid-cap segment. Key blue-chip stocks such as HDFC Bank, Reliance Industries, ICICI Bank, Axis Bank and TCS have delivered good returns over the past year. Compared with the benchmark allocation, Mirae Asset Tax Saver is underweight on energy, software and FMCG, and overweight on healthcare, engineering and metals.
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