Reliance Tax Saver Fund: Suffers from high volatility

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 15.40%, the fund has outperformed both the benchmark index (11.83%) and the category average (12.66%).

Annualised performance (%)

Yearly performance (%)

Basic facts
Date of launch: 21 Sep, 2005
Category: Equity
Type: ELSS
Average AUM: Rs 10,082.69 cr
Benchmark: S&P BSE 100 Total Return Index

What it costs
NAVs (As on 13 Aug 2018)
Growth option: Rs 57
Exit load: None
Dividend option: Rs 20
Minimum investment: Rs 500
Minimum sip amount: Rs 500
Expense ratio (As on 30 Jun 2018): 2.23%

Fund manager: Ashwani Kumar
Tenure: 12 years and 9 months
Education: B.SC, MBA

Where does the fund invest?
The fund takes a higher mid- and small-cap exposure relative to peers.

Top 5 sectors in portfolio (%)
The fund is significantly overweight in auto, engineering and metals.

Top 5 stocks in portfolio (%)
The fund has taken lop-sided exposure in its top bets.

How risky is it?
The fund’s risk-return profile is inferior to many of its peers.

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

Should you buy?
The fund has severely underperformed since the start of this year, mostly due to its aggressive stance. It has continued with its higher tilt towards mid- and smallcaps compared to its peers. Further, the fund has increased concentration in its top bets, resulting in a highly skewed portfolio.

The fund manager is quite comfortable deviating from its benchmark index in both sector and stock positions. It is currently overweight in automobiles, engineering and metals. While the fund’s freewheeling approach allows it to deliver much higher return than most peers during a market uptick, it can lag behind severely at other times. This higher degree of volatility may not be suitable for most investors.