Best Performing Tax Saving Mutual Fund for 2016-17 - DSP BlackRock

Nutan Gupta

23 Jan 2017

With the financial year end coming closer, a lot of people are seeking financial advice from tax planners and chartered accountants in order to save as much tax as they can. Equity linked savings scheme (ELSS) is considered to be the best tax-saving mutual fund and it has given exceptional returns over the years. While there are a lot of tax-saving mutual funds available in the market, only a few have managed to attract the attention of investors by giving higher returns. One such fund is DSP BlackRock Tax Saver Fund.

Launched in the year 2007, DSP BlackRock Tax Saver Mutual Fund has given returns of 13.83% since its inception. The primary objective of this scheme is to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity related securities of corporates, and to enable investors avail of a deduction from total income.

DSP BlackRock Tax Saving Mutual Fund has outperformed its benchmark Nifty 500 and its category returns over a 7-year period.

Trailing Returns (%)
1-year 3-year 5-year 7-year
Fund 18.35 22.68 21.44 13.38
Nifty 500 11.82 14.41 13.63 7.20
Category 12.16 19.59 17.32 10.90

*Source: Ace equity

The fund is managed by Rohit Singhania and the total assets under management of the fund stand at Rs. 1,494 crore as on 31st December, 2016. Majority of the fund’s corpus i.e. around 75% is invested in large-cap stocks. As far as the sector allocation is concerned, the fund has a higher exposure to the banking sector. The fund comprises a total of 68 stocks in its portfolio. There is no exit load that one has to bear if he chooses to redeem his investments.

Conclusion

While DSP BlackRock Tax saving Mutual Fund has been performing consistently over the last few years, it is advisable for investors to consult their financial advisors before making any investment decision. It is very important that the objective of fund should align with individual risk profiles.

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Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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Best Performing Tax Saving Mutual Fund for 2016-17 - DSP BlackRock

Nutan Gupta

23 Jan 2017

With the financial year end coming closer, a lot of people are seeking financial advice from tax planners and chartered accountants in order to save as much tax as they can. Equity linked savings scheme (ELSS) is considered to be the best tax-saving mutual fund and it has given exceptional returns over the years. While there are a lot of tax-saving mutual funds available in the market, only a few have managed to attract the attention of investors by giving higher returns. One such fund is DSP BlackRock Tax Saver Fund.

Launched in the year 2007, DSP BlackRock Tax Saver Mutual Fund has given returns of 13.83% since its inception. The primary objective of this scheme is to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity related securities of corporates, and to enable investors avail of a deduction from total income.

DSP BlackRock Tax Saving Mutual Fund has outperformed its benchmark Nifty 500 and its category returns over a 7-year period.

Trailing Returns (%)
1-year 3-year 5-year 7-year
Fund 18.35 22.68 21.44 13.38
Nifty 500 11.82 14.41 13.63 7.20
Category 12.16 19.59 17.32 10.90

*Source: Ace equity

The fund is managed by Rohit Singhania and the total assets under management of the fund stand at Rs. 1,494 crore as on 31st December, 2016. Majority of the fund’s corpus i.e. around 75% is invested in large-cap stocks. As far as the sector allocation is concerned, the fund has a higher exposure to the banking sector. The fund comprises a total of 68 stocks in its portfolio. There is no exit load that one has to bear if he chooses to redeem his investments.

Conclusion

While DSP BlackRock Tax saving Mutual Fund has been performing consistently over the last few years, it is advisable for investors to consult their financial advisors before making any investment decision. It is very important that the objective of fund should align with individual risk profiles.

Have Referral Code?