Mutual Fund Investment

Why you should choose Invesco India Tax Plan for tax-saving investments

ELSS is a variable income product, which helps the investors obtain better long-term returns compared to other alternatives along with tax-savings option which greatly reduces the tax burden from the investments.

Given these factors, it makes sense for conservative investors to opt for ELSS plans. Among several available plans, investors may also consider the Invesco India Tax Plan, which is a popular scheme due to its multi-cap strategy.

The fund managers Amit Ganatra and Dhimant Kothari maintain a 60/40 ratio in large limits and other actions. This multi-cap approach has been a key factor in the constant performance of the fund across all market conditions. The Invesco India Tax Plan Fund has distributed its assets as 96.67% in Indian equities, of which 61.99% is in large-cap companies, 17.61% in mid-cap stocks and the rest 6.07% is in small caps. The Invesco India Tax Plan was launched on 29th December 2006.

To consider a tax saving mutual fund, it is important to not just keep an eye on its section 80C applicability but also at long-term returns which will grow your investment corpus.

In the past one year, three-year and five-year periods, the scheme has given 8%, 12% and 9% returns while its benchmark BSE 200 index has given 10%, 13% and 8% returns in the same period, respectively. In general, ELSS schemes on an average have given 5%, 10% and 15% returns in the past one-year, three-year and five-year periods respectively.

In the last six months, fund managers have increased their exposure to well-established companies that have been attractive for two reasons: a solid business model (demand in the industry, high cash flow) and a decline in the markets. These companies include the likes of Bajaj Finance and Zee Entertainment Enterprises.

Returns

Fund	S&P BSE 200 TRI	Nifty 50 TRI
8.14%	10.40%	12.38%
12.53%	13.79%	15.12%
9.73%	8.92%	8.39%

The expense ratio is 2.23% as declared on 30-Nov-2019 whereas the average is 2.12% as of 30th November 2019.

The AUM of this Invesco India Tax Plan is Rs. 976.92 crores as of 30th November 2019. Yearwise total AUM of Invesco India Tax Plan from 2014 are as follows:

Invesco India Tax Plan

Year	Total AUM (Rs. Crores)
2014	212.62
2015	257.71
2016	319.89
2017	514.66
2018	686.49
2019	976.92

PERFORMANCE

1 Year	2 Year	3 Year	5 Year
10.04%	4.19%	13.80%	10.20%
12.78%	7.87%	14.40%	8.24%
11.09%	5.79%	14.75%	9.81%
6.91%	-1.35%	11.43%	8.73%

As seen in the above comparison, the 1-year return on Invesco India Tax Plan is 10% whereas the average return of the category is 6.91%. For a 5-year investment horizon, the fund gives you a 10% return on investment whereas the average return of the category is 9%. The return on benchmark indices S&P BSE 200 for 5 years is 9% and for NIFTY 50 is 8%. Invesco India Tax Plan gives the highest return on 5-year investment as compared to the category average, NIFTY 50 and S&P BSE 200. This makes it a good choice for investors looking for stable returns along with tax savings.

The SIP performance of Invesco India Tax Plan Fund has been great too.

SIP Performance (₹1000 invested every month)

1 Year	3 Year	5 Year	10 Year
₹12,000	₹36,000	₹60,000	₹1,20,000
12862.54	41118.38	77479.62	250214.08
7.19 %	14.22 %	29.13 %	108.51 %
13.52 %	8.82 %	10.16 %	14.06 %

The absolute return on Invesco India Tax Plan for 1 year is 7.19%. For 10 years, it is 108.51%. In other words, if you invested for 10 years in Invesco India Tax Plan, your money would have been more than doubled.

Mutual Funds for Beginners

Picking the right mutual fund for your first investment can get confusing. But it doesn’t have to this way. In this video, we tell you about how to go about selecting your first fund. You will see what the ideal categories for investment horizons ranging from 1 day to 7+ years. There are different types of mutual fund for beginners to start investing

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.

ELSS vs PPF: Which is a better tax saving investment?

ELSS vs PPF: A comparison between ELSS and PPF. Should you invest in ELSS (equity linked saving scheme) or PPF (public provident fund)?Watch this
video and you will get all your answers.
Comparison between most popular tax saving investment schemes under section 80c- ELSS & PPF
Watch this video, created in collaboration with ICICI Mutual Fund, and get the answer. Mr. Chintan Haria, Head of Product at ICICI Mutual Fund,
compares ELSS mutual funds and PPF on 3 most important parameters – lock-in period, returns, and the risk involved.
Also, get to know the right way to invest in tax saving.

Tax on Equity Mutual Funds in India | Income Taxation on Capital Gains & Dividends

How mutual funds are taxed in India?

We all invest for returns; In mutual fund investment you can earn return by two ways:

1: Dividends

2: Capital Gains

And how much tax you must pay for these returns, are calculated differently for equality and dead funds

Any fund which contributes 65% or more of its corpus in equities fund investment, is treated as Equity fund for taxation

See video and you will get to know …….

how equity funds are taxed?

Large-cap funds and their benefits

As an investor, it is often confusing to decide your vehicle of investment, especially when you hear varying opinions on television or from your peers. That’s why it is important to understand the benefits and risks of each segment, so that it is easier to make an informed decision. Amongst the several investments you might have come across, large-cap funds are considered a great choice. Let’s find out why:

What are large-cap funds?

As the name suggests, these funds invest in companies with a large market capitalisation. Market experts advise these funds for long-term wealth creation; what’s more, large-cap funds are also stable when it comes to delivering returns.

These funds invest 80% of their corpus in the top 100 companies listed in the stock market. Large-cap funds are great for an investor who is not too prone to taking risks; on the contrary, small-cap and mid-cap funds are prone to high risks. Due to the stability component, large-caps funds are often preferred by first-time investors, since they register consistent performance during different market cycles.

One thing that an investor must keep in mind is that these funds do not generate very high returns, even when the market is bullish, but large-cap funds are less vulnerable to volatility.

Advantages of large-cap funds

Great credibility: To begin with, these funds generally invest in large cap companies that make it to the list of top 100 in the stock market. These companies enjoy a great reputation and are helmed by an astute business leader. Further, their track record can be monitored, since they have been around for a while.

Strict governance practices: Another huge advantage of large-cap funds is that these companies follow stringent corporate governance practices. While investors may not receive skyrocketing returns (though they are good), these funds help towards wealth creation in the long run and pay dividends regularly.

Stable returns: There’s another reason to invest in these funds – they offer stable and low-risk returns. This makes it a great option for both first-time and seasoned investors, who want to get good returns but are risk-averse. In addition, these funds can withstand a bear market.

Things that an investor must keep in mind while investing in large-cap stocks

While large-cap funds are not as prone to risk like small and mid-cap funds, but you still need to weigh a few factors before you begin investing. Here are a few things an investor must keep in mind when he decides to go for large-cap funds:

Investment objective: Make sure you check if your investment objectives align with that of the fund. At the same time, check the track record of the fund and how it has performed during different market cycles (both bearish and bullish). Go for funds that are consistent in their performance, irrespective of the market conditions.
Fund manager’s experience: When it comes to large-cap funds, a fund manager plays a pivotal role in the fate of your returns. Those who have good experience and are adept in their field will be able to make the right decisions, so that you can reap high returns!
Expense ratio: This is also an important factor and includes costs such as brokerage, fee charged by the mutual fund house etc. Some fund houses may charge a steep rate, but they also offer great returns. Keep these factors in mind and then decide!
Check the exit load: This is a cost that an investor incurs directly. While this comes into the picture when you decide to sell your shares, but remember it does form a chunk of the NAV that you receive. If you have a lower exit load, then you get higher returns.

The bottomline
These funds are great for first-time investors, especially since 80% of the corpus is invested in large-cap companies. This makes it a relatively safe option! Besides, they are also more credible and have a strong financial reputation. While it’s a great option, the performance of this fund is also heavily dependent on the decision-making skills of your fund manager. If you have a great manager who’s skilled at what he does, then this is going to be a great choice of investment!