Table of Contents
L&T Tax Advantage Fund and SBI Magnum Tax Gain Fund both the schemes differ on a number of parameters. These differences exist, even though both the schemes are a part of the same category, that is, Equity ELSS. Equity Linked Savings Scheme (ELSS) are also known as tax saving Mutual Fund. These schemes offer individuals dual benefits of investing and tax deductions. Individuals Investing in ELSS schemes can claim a tax Deduction of up to INR 1,50,000 under Section 80C of income tax Act, 1961. However, these schemes have a lock-in period of three years which again is the shortest as compared to the other tax saving avenues. Though there are a number of schemes offered under one category, nevertheless; there are differences between them. So, let’s understand the differences between L&T Tax Advantage Fund and SBI Magnum Tax Gain Fund.
L&T Tax Advantage Fund’s investment objective is to attain long-term Capital appreciation from a Portfolio predominantly consisting of equity and equity-related securities. This open-ended tax savings Mutual Fund scheme was incepted on February 27, 2006. L&T Tax Advantage Fund uses S&P BSE 200 TRI Index as its benchmark index and is managed solely by Mr. S. N. Lahiri. In normal situations, L&T Tax Advantage Fund invests around 95% of its accumulated pooled money in equity and equity-related instruments and the remaining in money market instruments. As on March 31, 2018, HDFC Bank Limited, IndusInd Bank Limited, Larsen & Toubro Limited, and Godrej Properties Limited were some of the holdings of L&T Tax Advantage Fund’s portfolio. Greater diversification for risk control and 360-degree research are some of the benefits of L&T Tax Advantage Fund.
SBI Magnum Tax Gain Fund is an apt choice for investors seeking dual advantage of tax savings along with exposure in the equity markets. This scheme of SBI Mutual Fund aims to deliver investment benefits to its investors along with Offering tax deductions. The scheme uses S&P BSE 100 Index as its benchmark to construct its basket of assets. Mr. Dinesh Balachandran is the fund manager managing SBI Magnum Tax Gain Fund. Based on the Asset Allocation objective, SBI Magnum Tax Gain Fund invests around 80-100% of its fund money in equity and equity-related instruments while the remaining portion in money Market instruments. ICICI Bank Limited, Reliance Industries Limited, and Rural Electrification Corporation Limited are some of the holdings of SBI Magnum Tax Gain Fund’s portfolio as on March 31, 2018.
L&T Tax Advantage Fund and SBI Magnum Tax Gain Fund both the schemes differ on a number of parameters. So, let us understand the differences between both the schemes by comparing these parameters that are classified into four sections, namely, basics section, performance section, yearly performance section, and other details section.
It is the first section in the comparison of the schemes. The parameters of the basics section include scheme category, Fincash Rating, and Current NAV. With respect to scheme category, it can be said that both the schemes are a part of Equity ELSS category. The comparison of Fincash Rating states that L&T Tax Advantage Fund is a 4-Star rated scheme and SBI Magnum Tax Gain Fund is a 2-Star rated scheme. The comparison of NAV also states that both the schemes differ significantly. As on May 02, 2018, the NAV of L&T Tax Advantage Fund was approximately INR 57 and of SBI Magnum Tax Gain Fund was around 142. The summary of this section is tabulated as follows.
Parameters Basics NAV Net Assets (Cr) Launch Date Rating Category Sub Cat. Category Rank Risk Expense Ratio Sharpe Ratio Information Ratio Alpha Ratio Benchmark Exit Load L&T Tax Advantage Fund
Growth
Fund Details ₹89.4863 ↑ 0.40 (0.45 %) ₹3,300 on 31 Jul 23 27 Feb 06 ☆☆☆☆ Equity ELSS 7 Moderately High 1.98 1.14 -0.63 3.56 Not Available NIL SBI Magnum Tax Gain Fund
Growth
Fund Details ₹282.504 ↑ 1.48 (0.53 %) ₹15,374 on 31 Jul 23 7 May 07 ☆☆ Equity ELSS 31 Moderately High 1.79 1.65 0.48 9.77 Not Available NIL
Being the second section in the comparison, the parameter forming part of this section is CAGR or Compounded Annual Growth Rate returns. The comparison of performance section states that in most of the instances, L&T Tax Advantage Fund has performed better as compared to L&T Tax Advantage Fund. The table given below summarizes the comparison of the performance section.
Parameters Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch L&T Tax Advantage Fund
Growth
Fund Details 0.4% 7.8% 14.5% 15.5% 19.4% 9.3% 13.4% SBI Magnum Tax Gain Fund
Growth
Fund Details 1.5% 13.4% 20.7% 25.3% 25.1% 14.2% 11.9%
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The comparison of absolute returns generated by both the schemes for a particular year is done in this section. Analysis of absolute returns reveals that in certain years, L&T Tax Advantage Fund leads the race. On the other hand, in certain years, SBI Magnum Tax Gain Fund leads the race. The summary comparison of the yearly performance section is tabulated as follows.
Parameters Yearly Performance 2022 2021 2020 2019 2018 L&T Tax Advantage Fund
Growth
Fund Details -3% 30.3% 13.5% 4.6% -8.1% SBI Magnum Tax Gain Fund
Growth
Fund Details 6.9% 31% 18.9% 4% -8.3%
It is the last section in the comparison of the schemes. It includes parameters such as AUM, minimum SIP and lumpsum investment, and exit load. The minimum SIP and lumpsum investment for both the schemes are same, that is, INR 500. However, both the schemes differ considerably on account of AUM. The AUM of SBI Magnum Tax Gain Fund was around INR 6,067 Crores while of L&T Tax Advantage Fund was approximately INR 3,016 Crores as of March 31, 2018. In addition, both the schemes do not have any exit load as they belong to the category of equity ELSS. The comparison summary of this section is as shown in the table given below.
Parameters Other Details Min SIP Investment Min Investment Fund Manager L&T Tax Advantage Fund
Growth
Fund Details ₹500 ₹500 Gautam Bhupal - 0.76 Yr. SBI Magnum Tax Gain Fund
Growth
Fund Details ₹500 ₹500 Dinesh Balachandran - 6.98 Yr.
L&T Tax Advantage Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹8,735 31 Aug 20 ₹9,026 31 Aug 21 ₹13,627 31 Aug 22 ₹13,713 31 Aug 23 ₹15,690 SBI Magnum Tax Gain Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹8,931 31 Aug 20 ₹9,588 31 Aug 21 ₹14,572 31 Aug 22 ₹15,615 31 Aug 23 ₹19,279
L&T Tax Advantage Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 1.42% Equity 98.58% Equity Sector Allocation
Sector Value Financial Services 29.98% Industrials 19.02% Consumer Cyclical 16.91% Technology 12.53% Consumer Defensive 8.71% Basic Materials 4.09% Health Care 3.53% Energy 3.49% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 06 | HDFCBANK8% ₹264 Cr 1,680,600
↓ -99,392 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | ICICIBANK6% ₹182 Cr 1,897,100 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Jul 22 | LT5% ₹155 Cr 574,100 Cholamandalam Investment and Finance Co Ltd (Financial Services)
Equity, Since 31 Dec 21 | CHOLAFIN4% ₹125 Cr 1,114,400 KPIT Technologies Ltd (Technology)
Equity, Since 30 Sep 21 | KPITTECH4% ₹125 Cr 1,059,800 Indian Hotels Co Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | 5008503% ₹111 Cr 2,639,300
↓ -286,573 Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 21 | RELIANCE3% ₹109 Cr 451,600 CG Power & Industrial Solutions Ltd (Industrials)
Equity, Since 30 Apr 22 | 5000933% ₹107 Cr 2,486,300 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 31 Jul 22 | SUNPHARMA3% ₹98 Cr 880,400 Infosys Ltd (Technology)
Equity, Since 31 Mar 06 | INFY3% ₹89 Cr 622,100
↓ -117,300 SBI Magnum Tax Gain Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 4.32% Equity 95.68% Equity Sector Allocation
Sector Value Financial Services 25.93% Industrials 14.7% Health Care 9.35% Consumer Cyclical 8.64% Energy 8.31% Basic Materials 8.1% Technology 8.03% Utility 5.01% Consumer Defensive 3.14% Communication Services 3.06% Real Estate 1.42% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 17 | ICICIBANK5% ₹711 Cr 7,416,237 Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 07 | LT4% ₹667 Cr 2,468,968 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Jun 07 | HDFCBANK4% ₹667 Cr 4,243,253 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 31 Dec 16 | M&M3% ₹538 Cr 3,415,083 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Mar 17 | BHARTIARTL3% ₹476 Cr 5,563,576 Cummins India Ltd (Industrials)
Equity, Since 28 Feb 19 | 5004803% ₹472 Cr 2,763,190
↓ -94,007 Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 06 | RELIANCE3% ₹466 Cr 1,937,574 Axis Bank Ltd (Financial Services)
Equity, Since 30 Sep 11 | 5322153% ₹437 Cr 4,492,332 State Bank of India (Financial Services)
Equity, Since 31 May 06 | SBIN3% ₹431 Cr 7,685,639 Cipla Ltd Shs Dematerialised (Healthcare)
Equity, Since 31 Jul 18 | 5000873% ₹428 Cr 3,403,528
Therefore, based on the above pointers, it can be concluded that both the schemes differ on a number of parameters. As a consequence, individuals should be careful while choosing any of the schemes for investment. They should verify whether the scheme matches their investment objective or not. Also, individuals must understand the functioning of the scheme completely. This will help them to attain their objectives on time along with ensuring the safety of their investment.