ELSS or Tax Saving Fund:-
Aditya Birla Tax Relief 96
- This fund had been the leader in this category for a long time.
- 55% of AUM(Assets Under Management) is in Mid/Small-Cap Stocks. which haven't done well in 1 year.
- Due to the above reason, this fund is currently not performing as well as it's glorious track record. But it is one of the rare ELSS Funds which has good exposure in Mid and Small Caps as well.
- Future of Mid and Small Cap Stocks in India is encouraging which is why Aditya Birla Tax Relief fund will again come up as a leader in the ELSS category.
Large Cap Fund :-
- This fund has consistently beaten/outperformed it's Benchmark Index and Category Average over 1, 3, 5 year periods.
- Expense Ratio(annual fee charged for the management of funds) of this fund pretty low and reasonable.
- After SEBI reclassification a Large Cap Mutual Fund now has to invest 80% of it's AUM in Market Capitalization wise top 100 Indian companies only.
- Even with the above restriction, Axis Bluechip has outperformed others in this category which is a kudos to its Fund Manager as well.
- Has consistently performed well over the last 3 to 5 years.
- This fund gives you international exposure as well. And you don't have to pay extra tax for it.
- More than 25% of its holdings are in Top International Stocks like Amazon, Facebook, Alphabet Inc(Google's parent company), etc.
- The turnover for this fund is low which means Fund Manager holds funds for the long term and doesn't change the portfolio frequently. It focuses only on 25-30 stocks.
- This is probably the best category for Mutual Fund investment as there is no restriction on the Fund Manager to select the stocks and has complete freedom to outperform the market and deliver you more return.
Mid Cap Fund :-
- The expense ratio is well below Category Average and has consistently outperformed its Benchmark Index.
- Portfolio of Assets is well balanced and Diversified.
- After SEBI reclassification Mid Cap Fund now is allowed to invest only in Rank 101 to Rank 250 Company based on Market Cap. Thus now all the Mid Cap MF are constrained on these 150 companies.
- This Mid Cap funds are not very attractive this year.
Small Cap Fund:-
- This is a good time to invest in Small Cap funds because over last 2-3 years Small Cap stocks have fallen drastically and now are at pretty attractive prices.
- After the SEBI reclassification, Small Cap Fund now is allowed to invest any stock beyond Rank 251 based on Market Capitalization. Thus the Fund Manager has a pool of ~2500 companies to select from.
- This fund performed well even in adverse times. And has beaten its Benchmark by a margin over the last 2 years.
- Thus we can say that it's justified to believe in this AMC, Fund Manager, and their investment philosophy.
by Deep Shekhar