What makes L&T Tax Advantage a leading tax-saving mutual fund
Low risk profile and higher return places L&T Tax Advantage Fund high on the risk-return parameter and has significantly outperformed the benchmark.
By ET Bureau | Updated:
BCCL
With a 10-year return of 12.07%, the fund has outperformed both the benchmark (6.65%) and the category (9.39%) by a wide margin.
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.
L&T Tax Advantage Fund
How has the fund performed?
With a 10-year return of 12.07%, the fund has outperformed both the benchmark (6.65%) and the category (9.39%) by a wide margin. The fund has significantly outperformed the category and the benchmark. As on 7 Nov 2017
Annualised performance (%) The fund has outperformed across time periods. As on 7 Nov 2017
Yearly performance (%) The fund has beaten the index for the past several years. As on 7 Nov 2017
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Basic facts Date of launch : 27 Feb 2006 Category : Equity Type : Tax Planning
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Average AUM : Rs 2,730.39 cr Benchmark : S&P BSE 200 Index
Exit load : 0 *As on 7 Nov 2017 ^As on 31 Aug 2017
Fund managers Soumendra Nath Lahiri Tenure: 4 yearS and 11 months Education: BE, PGDM
Where does the fund invest? This fund has a large portfolio of 64 stocks, so concentration risk is low.
How risky is it? Despite better returns, its risk profile is lower than benchmark and category average. Wherever not specified, data as on 31 Oct 2017. Source: Value Research
Should you buy? This fund has generated good returns in all market phases. Even during the two years—2008 and 2011—when the market was in a slump, it has outperformed the benchmark index. Its mandate to have at least 60 stocks in its portfolio— 64 stocks now—and the resultant low concentration risk is one reason for its good performance.
Low exposure to small-cap stocks and the fund manager’s bottom-up strategy of selecting stocks that are likely to do well in the next 3-5 years have also helped the fund fare well. Due to its better downside protection, this fund’s risk profile— measured by standard deviation— is lower than the category average and benchmark. Low risk profile and higher return places this fund high on the risk-return parameter. It can be considered a suitable pick among tax planning funds.
