Mutual Funds

Mirae Asset Tax Saver: A good blend of large- and mid-caps

Yoganand D | Updated on December 08, 2019 Published on December 08, 2019

Over the past one- and three-year periods, the fund has clocked benchmark-beating returns

Investors seeking tax benefits can invest in equity-linked saving schemes (ELSS), which have a three-year lock-in period. Consider buying units of Mirae Asset Tax Saver, a chart-topper during the past three years.

The fund has delivered 17.8 per cent returns annually over the past three years. Although it has a reasonably short track record of four years, its recent performance in volatile markets has been noteworthy.

Over the past one- and three-year periods, the fund has clocked returns of 13 per cent and 17.8 per cent, outpacing the benchmark (Nifty 200 TRI) returns of 9 per cent and 14 per cent, respectively.

Mirae Asset Tax Saver is placed in the top quartile of the ELSS category in the last one- and three-year periods and has also outpaced some of the long-term funds such as Invesco India Tax Plan and ICICI Prudential Long Term Equity.

Performance & portfolio

After a benchmark-beating performance in 2016 and 2017, the fund managed to contain the downside well in the lacklustre 2018 market. In the current year (year-to-date), the scheme has once again delivered benchmark-beating returns.

Mirae Asset Tax Saver continues to fully invest in equity and has less than 1 per cent holdings in cash. Since inception, banking has been the top preferred sector and it currently holds about 28.8 per cent of its total assets. In recent months, the fund has increased allocations to both private as well as public sector banks which have delivered good returns over the past one year.

The fund has slightly trimmed its allocation to the software and consumer durables sectors over the past one year, and increased it in consumer non-durables and finance.

Over the past year, the fund has taken exposure in the power and mineral sectors while exiting pesticides. Interestingly, the allocations towards petroleum products, which consist of Reliance Industries and HPCL, have yielded good returns over the past year.

Mirae Asset Tax Saver has the flexibility to invest across market capitalisation, theme and investment styles. It has allocated 70 per cent in large-cap, 24 per cent in mid-cap and the balance in small-cap stocks.

It holds about 56 stocks in its kitty, providing ample diversification. Some key blue-chip stocks are HDFC Bank, ICICI Bank, Reliance Industries, SBI, Infosys and TCS, which have provided good returns over the past year.

Mirae Asset Tax Saver is underweight on energy, software and chemicals, and overweight on healthcare, financial and textiles, compared with the benchmark allocation.

 

Published on December 08, 2019
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