Principal Tax Savings Fund: Suitable for high risk takers

ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals of the fund, its portfolio and performance to help you make an informed investment decision.

How has the fund performed?
With a 10-year return of 10.46%, the fund has outperformed the benchmark index (9.46%) but lags behind the category average (12.06%).

The fund has underperformed its peers over the past decade.


Annualised performance (%)

The fund has outperformed over 3- and 5-year periods.
As on June 19, 2018

Yearly performance (%)

The fund put on a strong show last year, but has slipped this year.
As on June 19, 2018

Basic facts

Date of launch: 31 Mar 1996
Category: Equity
Type: Tax saving
Average AUM: Rs 393.11 cr
Benchmark: S&P BSE 200 index

What it costs
NAVs*
Growth option: Rs 208
Dividend option: Rs 208
Minimum investment: Rs 500
Minimum SIP amount: Rs 500
Expense ratio^ (%): 2.31
Exit load: 1% for redemption within 365 days
*As on 19 Jun 2018
^As on 30 Apr 2018

Fund manager: P.V.K. Mohan
Tenure: 7 years and 8 months
Education: B.E, MBA

Where does the fund invest?
The fund has a multi-cap approach, and is currently tilted towards large-caps.

The fund has overweight positions in FMCG and construction relative to index.

The fund’s top picks are mostly index heavyweights.

How risky is it?
The fund retains a superior risk-return profile compared to peers.

Wherever not specified, data as on 31 May 2018. Source: Value Research

Should you buy?
This tax-saving fund has no market-cap bias. While currently tilted towards large-caps, it has the flexibility to invest in firms with lower market-cap. The fund prefers companies that are either leaders in their segment or have scalable, sustainable business models. While its top picks are mostly index heavyweights, it is comfort able picking stocks outside the index. The fund has not been consistent in recent years—it was among the top performers last year, but its returns have dipped this year. The fund has stuck with its mid- and small-cap positions, taking calibrated risk in conviction bets despite the short-term pain. It has the ability to capture higher market upside than many peers, but may fall harder during downturns. It is more suited for investors with high risk appetite.