Mirae Asset Tax Saver Fund Review and Performance Analysis

Mutual fund plans have gained a lot of popularity in the last decade. Mutual funds are now increasingly seeing new investors putting their money to chase higher returns in markets using the superior analysis and knowledge at the disposal of the fund houses and the fund managers. 

Mutual funds offer certain advantages over other forms of investment instruments such as the ability to generate higher returns due to larger asset allocation across a variety of industries, balanced portfolio and smarter management of funds due to the experience of the fund managers. 

Moreover, certain mutual funds also offer a wide variety of investment options that include speciality funds, open or closed plans, or a combination of all of these. Investors can choose any fund based on their risk appetite.

Mirae Asset Tax Saver Fund is the good tax saving mutual fund available in the market. This fund was launched in 28th December 2015 and has been managed by Neelesh Surana since then. This fund looks to invest in equity and related instruments according to different market capitalization, investing themes as well as investment styles to generate returns over a long-term but it also offers tax-saving advantage under the section 80C of the Income Tax Act, 1961. 

Like all other tax saving mutual fund schemes this scheme also does not guarantee or assure any returns. The benchmark index for Mirae Asset Tax Saver Fund is NIFTY 200. Like all other ELSS funds, the minimum investment is of Rs. 500 either with a monthly or a quarterly frequency and in multiples of Rs. 500/- thereafter. 

The monthly average expense ratio (including Statutory Levies) as on November 2019 is 2.19% for the regular plan and o.23% for the direct plan. Expense ratio is the commission charged by mutual fund houses from their investors as a fee for their services of the overall management of the fund allocation. 

This product is suitable for investors who are seeking: 

  • Growth of capital over the long term 
  • Invests predominantly in equity and equity-related instrument
  • Looking to save tax through an ELSS 

This fund allocates most of its funds on banking, consumer non-durables and the financial Sector. More than 29% of the allocation is currently in the banking sector as on 30th November 2019. 

The performance report of the Mirae Asset Tax Saver Fund is very impressive. The return on investment of the last one year is 8.84%, last 3 years is 13.86% and from inception, it is 16.41%. If you invested Rs 10,000 in Dec 2015, today your asset value would be Rs 17,703. In comparison, benchmark indices Nifty 200 and S&P BSE Sensex would have returned Rs 14,854 and Rs 15,616 respectively in the same period.

Mirae Asset Tax Saver Fund re-aligned its allocations six months earlier. Now, the allocation in software stocks is down from 9.39% to 7.98%. Banking is still the highest weighted sector in the fund’s asset allocation but its share has increased from 26.23% in June 2019 to 29.03% on November 30 2019. 

In terms of companies held too, the realigned allocation is now visible. The investment in Tata Consultancy Services was the 3rd highest on 28th June 2019 (4.19%) but it has now decreased to the 9th place as on 30th November 2019 (3.33%). The highest holding is in HDFC Bank Limited. 

Mirae Asset Tax Saver Fund’s overall asset allocation is 99.21% in equities and 0.79% in Cash & Other Receivables. The total AUM is Rs 33,282 crores as of 30th September 2019. 

Neelesh Surana has invested in dominant players in all main sectors, which largely guarantees portfolio stability. This is reflected in its high beta of 0.95. The fund has consistently performed compared to benchmarks and its peers in the ELSS category. In the last three years, the fund has returned 16.41% making it one of the better performing ELSS schemes out there. 

Published by Nidhi Mehra

I am blogger with 5 years of experience in writing articles and topics related to finance and funds

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