Aditya Birla Sun Life Tax Relief 96 Fund is one of the well-performing Equity Linked Savings Scheme (ELSS) funds in the market today. It is among few ELSS funds which delivered positive returns over different time frames. Sustained superior performance and proven expertise in beating peers across different phases of the market cycle makes the fund an attractive option.
With returns that are competitive with other ELSS funds and an experienced fund manager, what does the future of this fund look like? Read the full review to find out.
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Investment Objective of Aditya Birla Sun Life Tax Relief 96 Fund
The main objective of this fund is to produce a scheme that provides an opportunity to save tax while growing your money through equity investments.
The scheme seeks long-term capital growth and will invest approximately 80 per cent of its assets in equity, while the balance 20 per cent would be a invested in debt and money market instruments.
It was converted to an open-ended scheme with effect from July 1999. A combination of top down & bottom up approach will be followed in the stock selection process.
Absolute returns (%)
|+/- Category (%)||-2.85||25.32||11.12||19.10||15.12||
The investment philosophy of the fund is to invest in quality companies. Quality orientation involves selecting companies run by professional managements which have strong promoters, adhere to corporate governance, spend sizeable amount of revenue on R&D, the predictability of earnings, companies which have strong moats.
Integration of ESG (Environmental, Social & Governance) factors into investment analysis and portfolio construction is practiced on a regular basis. While investing fund manager of this fund avoid buying companies that have excessive business uncertainty.
Aditya Birla Sun Life Tax Relief 96 Fund – Review
Aditya Birla Sun Life Tax Relief 96 Fund is a ELSS fund which has consistently outperformed its benchmark since its inception and is one of the most popular ELSS fund in market today.
ELSS is a dedicated mutual fund scheme that allows investors to save tax. It also provides an opportunity for long-term capital appreciation.
An ELSS fund manager invests in a diversified portfolio, predominantly consisting of equity and equity related instruments that carry high-risk and have the potential to deliver high-returns.
Key points for Aditya Birla Sun Life Tax Relief 96 Fund is:
• Aditya Birla Sun Life Tax Relief 96 Fund has been rated as a 5-star fund by Groww and ranked 2 in ELSS fund category by Crisil ( for quarter ending December 2017).
• AUM of close to ₹ 4759 Cr.
• It is a very old fund, launched in March 29, 1996. So, its performance can be ease to judge.
• Past 5 years return is 22.11 % per annum.
• Has consistently outperformed its benchmark BSE S&P 100 and NIFTY 50 since its launch.
• The top portfolio holdings of the fund include Sundaram Clayton Ltd., Honeywell Automation India Ltd., Gillette India Ltd., Bayer Cropscience Ltd., Thomas Cook Ltd., Reliance Industries Ltd., Pfizer Ltd., Shoppers Stop Ltd. Glaxo Smithkline Pharmaceuticals Ltd. etc.
• The holdings are balanced across various sectors with maximum weightage given to consumer goods ( 19.9 % ) followed by financial services ( 16.9 % ) and automobile ( 16.2 % ).
• Minimum SIP is ₹ 500 for this fund.
Launched in 1996, Aditya Birla Sun Life Tax Relief 96 Fund, an aggressive multi cap fund, follows a go anywhere strategy, with no pre-defined market capitalisation limits while selecting stocks in the portfolio. As the markets near life-time highs, the fund manager Ajay Garg has a higher allocation to mid caps, with such stocks constituting 59.9 % of the portfolio. The balance is spread across large and small cap companies. Large cap stocks constitute of 39.9 % and small cap stocks consists of 0.2 % only.
Having most of the portion in mid caps means most of your money will be invested in stocks of mid sized companies. Mid cap are compact companies of the equity market, falling somewhere between small and large cap companies and are 100-250 companies in a market after large cap companies. Stocks of mid cap companies are riskier then large cap but not as risky investment instrument as small cap.
Aditya Birla Sun Life Tax Relief 96 Fund has a very well diversified portfolio. The portfolio is well balanced between large cap and small / mid cap stocks and tend to do well across different market conditions, as is evident from the rolling returns of Birla Sun Life Tax Relief 96 Fund over the last years.
The fund has not only outperformed its benchmark across multi-trailing time period but has also outperformed its category funds by a considerable margin generating 30.47 % and 12.57 % returns over 1-year and 3-year period respectively.
Thus, the portfolio has healthy historical earnings growth when compared to category and has a rich valuation in terms of forward-looking cash flow metrics and prospective earnings basis.
As, the fund invests majorly in mid cap funds and large cap funds, and a very small proportion is invested in small cap funds, it is less risky than funds that invest majorly in small cap companies.
Recently in Indian market, big investors like mutual fund houses, started investing in mid-cap stocks, because the share price of large caps has increased substantially. That results in the prices of the mid-caps, climbing upwards steadily and made them an attractive investment category with high growth potential. So, Aditya Birla Sun Life Tax Relief 96 Fund have great future prospects and may give you good returns in coming times.
Mid cap stocks have shown exponential growth in recent past and you can make lots of money investing in funds having mid cap stocks, but how much you invest in mid cap fund depends on your risk appetite. And remember, all mid-cap companies are not the large cap of tomorrow’s. So, to sum it up, mid-cap funds can be great investment instruments for investors looking for funds with high return possibilities, without the volatility of small caps and index-related returns like those of large cap funds.
Aditya Birla Sun Life Tax Relief 96 Fund – Fund Manager
Aditya Birla Sun Life Tax Relief 96 Fund is managed by Ajay Garg since 2006.
Mr. Ajay Garg is a Senior Fund Manager at Aditya Birla Sun Life AMC Limited. Ajay has worked at Birla Sun Life Mutual since 2003 and before this he was at Birla Sun Life Securities Ltd. He holds a BE in electronics and an MBA in finance.
With more than 15 years’ experience working in financial services, Ajay Garg mainly invests in the small- and mid-cap space. In his Birla Sun Life MNC (multinational) fund, he seeks to provide investors a well-diversified portfolio in growth-driven sectors such as fast moving consumer goods, pharmaceuticals and auto and ancillaries. He invests exclusively in securities of multi-national companies as he looks for long-term capital growth. Ajay has worked at Birla Sun Life Mutual since 2003 and before this he was at Birla Sun Life Securities Ltd. He holds a BE in electronics and an MBA in finance.
Aditya Birla Sun Life Tax Relief 96 Fund – Amazing Facts
Aditya Birla Sun Life Tax Relief 96 is an Open-ended ELSS, was launched in more than 20 years back, but is among the top 3 ELSS funds in terms of three years trailing returns even today.
If you had invested 1 lakh in Birla Sun Life Tax Relief 96 Fund at its inception in 1996 the value of your investment today would be nearly 1 crore on an adjusted NAV basis.
Aditya Birla Sun Life Tax Relief 96 Fund has a terrific dividend pay out. The dividend option of the scheme has paid dividends every year over the last 10 years, even during the bear market periods. Since inception, the fund has been rewarding its investors with regular tax-free dividends ( 2385% on face value so far )
In terms of volatility measure, as measured by annualized standard deviation of monthly returns over a three year, Birla Sun Life Tax Relief 96 had lower volatility than the other ELSS funds.
The Aditya Birla Sun Life Tax Relief 96 Fund has beaten the index 100% of the times over the last 5 years. The outperformance gap has also been quite stable over the past 5 years, which shows that the fund manager employs stable consistent strategy.
Being an ELSS fund category, the holder can claim deduction of the amount invested in the scheme under section 80C of the Income Tax Act, 1961. The maximum amount of deduction that can be availed under the above mentioned act is ₹ 1,50,000 for a particular assessment year (AY). However, the amount invested in ELSS should not be withdrawn for a period of minimum 3 years, which is often referred to as lock-in period.
The dividend received by the investors from Aditya Birla Sun Life Tax Relief 96 Fund is tax free in the hands of the investors.
The fund follows a combination of top-down and bottom-up investment style in stock selection process.
- The top-down approach will focus on an analysis of macroeconomic factors, economic changes and trends, key policy changes, infrastructure spending etc.
- The bottom-up approach would seek to identify companies with high profitability and scalability, supported by sustainable competitive advantage.
ELSS Funds of 2018
Other best Tax Saving ELSS fund options for 2018 are :
To look at some of the best performing funds from every category, check out Groww 30 best mutual funds to invest in 2018.
Disclaimer: the views expressed here are of the author and do not relfect those of Groww.