IDFC Tax Advantage (ELSS)

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We like this fund for its consistency and ability to contain its fall when the markets tank. Further, the large-cap orientation adds stability to its performance.

 

Strategy
This fund invests in a well-diversified portfolio of companies that are well-managed and available at reasonable value. This fund's equity research process identifies stocks which can generate sustainable cash profits growth over a long-term. The fund manager maintains diversification across sectors, with investments in a single stock rarely crossing 5 per cent allocation. There is no market capitalisation bias, but the fund manager maintains a large-cap orientation, with exposure to mid-cap going up as and when the markets start to rise.

 

Further, a bottom-up stock picking approach is adopted, and stocks are identified through a process of forecasting earnings and interaction with company management. Once invested in a company, the fund manager tracks them consistently to optimise portfolio performance. This way, it gets easier to exit a good performing stock when it achieves the desired price point. Exits from stocks such as Exide, Asian Paints, eClerx services and L&T in 2011, demonstrate this disciplined approach.

 

Performance

This fund started on the wrong foot in 2008 only to post lacklustre returns in its first year. In 2009, it posted 70.81 per cent returns, which was still low compared to the category average and the benchmark. However, since then the fund's performance has been improving. In 2010, it was able to ride the market upswing, by increasing its exposure to healthcare and consumer durables and adopting a multi-cap approach by increasing exposure to mid-cap stocks. In 2011, it managed to curtail its losses with great resilience. This ability to curtail losses was achieved through a mix of cash calls and quality stock selection such as Eros media, Bharti, Lupin, TCS and Infosys. In 2012, this fund has managed to do better than the category average and its benchmark by making it to the top-quartile. It achieved this performance by reducing its exposure to metals, consumer durables and communication sectors and increasing its exposure to the financial, services and healthcare sectors.

 

Why invest?

Low-risk proposition in the category, which is well-diversified with consistent returns over the past three years, makes a strong investment case for this fund.

Happy Investing!!

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

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