Fund review: Aditya Birla Sun Life Tax relief 96 Fund - MySIPonline
Mar 10, 2018 4 min read

Fund Review: Aditya Birla Sun Life Tax Relief 96 Fund

Read this blog to get a brief knowledge about Aditya Birla Sun Life Tax Relief 96 Fund.
Aditya Birla Sun Life AMC Ltd. is one of the leading Asset Management Companies of India. Since its launch in 1994, Aditya Birla Sun Life Mutual Fund has managed to rise as an epitome among its peers for deepening the roots of mutual funds in the country.

Amongst all the solutions that are provided by the AMC like savings, regular income, wealth creation, etc., tax saving is the most prominent one. Aditya Birla Sun Life Tax Relief 96 Fund is an integral part of ELSS tax saving mutual funds provided by this AMC.

Fund Overview:

This is one of the oldest open-ended ELSS schemes that strive for attaining dual benefit of saving tax whilst growing money through equity investments. As it is known, ELSS funds qualify for tax exemption under section 80C of the Income Tax Act, 1961, therefore investment up to Rs 1.5 lac in these funds can be claimed as tax deduction in every financial year. One can save up to Rs. 46,350 per annum in taxes simultaneously generating wealth over a long period by making an investment this fund. The lock-in period of the scheme is 3 years which is the least as compared to other tax saving investment options such as PPF, NSC, NPS, etc. Ace fund manager Mr. Ajay Garg, having an experience of 22 years, has been managing the investments in the fund precisely. Because of his vigilant behavior of picking up quality stocks, the fund has managed to outperform the benchmark almost every time.

Fund’s Objective and Strategy:

Launched on March 28, 1996, the fund aims at saving tax whilst generating higher returns on the investments done for a longer period of time, say for more than 3 years. The scheme pays more attention to attain long-term capital growth and invests at least 80% of its assets in equity and at most 20% in debt and money market instruments.

It works on the merger of top-down and bottom-up approach for selection of good stocks. The focal point of the top-down approach is the analysis of macroeconomic factors, economic and key policy changes, spending on infrastructure, etc. On the other hand, the bottom-down approach tends to look out for the companies that have high profitability and scalability as its qualitative features. Following the multi-cap approach, this fund invests in those quality companies that have strong professional management.

Being an ELSS scheme, it does not charge any entry or exit load on investments and minimum amount required for making an investment is Rs 500. A total of Rs 4,949 crore assets have been accrued as on January 31, 2018. Net Asset Value of ABSL Tax Relief 96 Fund Growth is Rs 30.39 and NAV for dividend is Rs 154.71 as on March 09, 2018.

Fund’s Portfolio

Asset Allocation in %

table-03

Source: Value Research

As can be seen from the pie chart, currently, the fund has invested 98% in equity and just 1.65% in debt instruments, and the top five sector allocation of the fund are in healthcare, financial, automobile, services, and FMCG whose percentage break-up can be seen in the chart below.

table-04

Source: Value Research

Portfolio aggregate of the fund as on January 31, 2018 is:

table-05

Source: Value Research

Fund’s Performance:

Performance of Aditya Birla Sun Life Tax Relief 96 Fund is measured by comparing the calendar year returns of the fund with the returns of S&P BSE 200 (taken as its benchmark) and the average returns of other schemes under the same category. From the below table, it is clearly evident that the fund has outperformed its benchmark and category from 2012 to 2017.

table-07

Source: Value Research

From the above data, the best performance of the fund is observed in the year 2014 where the return is 54.54% and the worst performance is observed in the year 2016 with 3.42% return which was still comparatively better than its peers and the benchmark.

Fund’s Risk Measures:

Let us delve into the different factors which are considered for calculating risk such as Mean, Standard Deviation, Sharpe, Alpha, Beta, and Sortino.

table-06

Source: Value Research

*All the values are in percentage.

* Data as on February 28, 2018. The Risk Measures have been calculated using the calendar month returns of the last three years.

Why Should You Pick this Fund?

The fund management by Mr. Ajay Garg is so well which is seen as the fund has offered 25.46 % return since inception, hence becoming the best option for investment in ELSS as compared to its peers. Investing in this fund is suitable for only those who have a high-risk capacity. Being a distinguished fund, it hunts for the companies that holds an immense potential for growth in future and can provide considerably high returns.

In today’s time where everyone goes for ‘Buy 1, Get 1’ strategy, why not opt for this fund for availing both the benefits of tax saving and high-returns. If you are thinking of making an investment in the same, connect with us and we would help you start your investment and solve every query related to the same.

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