Reliance Tax Saver (ELSS) fund : Outsized returns with higher risk

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 14.86%, the fund has outperformed both the category average (11.79%) and the benchmark return (8.95%) by a good margin.

BASIC FACTS
Date of launch : 21 Sep 2005
Category : Equity
Type : Tax Planning
Average AUM : Rs 7,661.39 cr
Benchmark : S&P BSE 100 Index

WHAT IT COSTS
NAVS^
Growth option : Rs 55.19
Dividend option : Rs 21.86
Yearly dividend option : Rs 11.67
Minimum investment : Rs 500
Minimum SIP amount : Rs 500
Expense ratio (%) : 1.99
Exit load : 0
^As on 18 Apr 2017

Fund Manager: Ashwani Kumar
Tenure: 11 years and 7 months
Education: B.Sc, MBA


WHERE DOES THE FUND INVEST?

HOW RISKY IS IT?

Wherever not specified, data as on 31 Mar 2017. Source: Value Research

SHOULD YOU BUY?
This is an aggressive fund in the tax-saver segment, taking on higher exposure to small- and mid-caps compared to peers. It prefers taking concentrated bets in its top picks, and is also comfortable deviating substantially from its benchmark index in both sector and stock positions. Recently, the fund manager increased bets in the financials space while paring down exposure to industrials.

The fund’s freewheeling approach allows it to generate higher alpha than many peers. However, this also results in much higher volatility in performance, with the fund doing far better in a rising market than during a flat or falling market. The fund is suitable for investors comfortable with taking on higher risk in search of outsized return during a market rally.