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 ₹75.754 ↓ -0.59 (-0.77 %) ₹3,007 on 28 Feb 23 27 Feb 06 ☆☆☆☆ Equity ELSS 7 Moderately High 1.97 -0.13 -0.8 -0.62 Not Available NIL SBI Magnum Tax Gain Fund
Growth
Fund Details ₹229.725 ↓ -1.83 (-0.79 %) ₹12,158 on 28 Feb 23 7 May 07 ☆☆ Equity ELSS 31 Moderately High 1.85 0.41 0.33 6.95 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 -2.7% -2% -4% -3.3% 27.9% 7.2% 12.6% SBI Magnum Tax Gain Fund
Growth
Fund Details -1.6% -0.9% 1.2% 6.6% 34% 11.1% 10.8%
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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 - 0.19 Yr. SBI Magnum Tax Gain Fund
Growth
Fund Details ₹500 ₹500 Dinesh Balachandran - 6.4 Yr.
L&T Tax Advantage Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹8,872 29 Feb 20 ₹9,409 28 Feb 21 ₹11,676 28 Feb 22 ₹13,496 28 Feb 23 ₹13,767 SBI Magnum Tax Gain Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹9,375 29 Feb 20 ₹9,505 28 Feb 21 ₹12,590 28 Feb 22 ₹14,598 28 Feb 23 ₹16,167
L&T Tax Advantage Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 1.35% Equity 98.65% Equity Sector Allocation
Sector Value Financial Services 31.48% Consumer Cyclical 18.53% Technology 12.84% Industrials 12.84% Consumer Defensive 7.26% Basic Materials 6.43% Health Care 3.41% Energy 2.97% Utility 1.91% Real Estate 0.96% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | ICICIBANK7% ₹203 Cr 2,442,000
↓ -177,900 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 06 | HDFCBANK6% ₹183 Cr 1,140,100 State Bank of India (Financial Services)
Equity, Since 31 Jan 19 | SBIN6% ₹174 Cr 3,140,300 Infosys Ltd (Technology)
Equity, Since 31 Mar 06 | INFY5% ₹141 Cr 919,900
↓ -103,900 Indian Hotels Co Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | 5008504% ₹128 Cr 4,240,500 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Jul 22 | LT4% ₹114 Cr 538,300 Persistent Systems Ltd (Technology)
Equity, Since 31 Jul 21 | PERSISTENT4% ₹111 Cr 236,700
↓ -39,700 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 31 Jul 22 | HINDUNILVR4% ₹108 Cr 419,300 Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 21 | RELIANCE3% ₹90 Cr 383,700 KPIT Technologies Ltd (Technology)
Equity, Since 30 Sep 21 | KPITTECH3% ₹81 Cr 1,059,800 SBI Magnum Tax Gain Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 7.93% Equity 92.07% Equity Sector Allocation
Sector Value Financial Services 28.07% Industrials 13.26% Consumer Cyclical 8.23% Energy 8.23% Technology 7.01% Basic Materials 6.75% Health Care 6.21% Utility 5.35% Consumer Defensive 3.34% Communication Services 3.28% Real Estate 2.34% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 17 | ICICIBANK5% ₹617 Cr 7,416,237 Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 07 | LT4% ₹525 Cr 2,468,968 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 31 Dec 16 | M&M4% ₹471 Cr 3,415,083 Cummins India Ltd (Industrials)
Equity, Since 28 Feb 19 | 5004804% ₹443 Cr 3,088,066 Reliance Industries Ltd (Energy)
Equity, Since 30 Apr 06 | RELIANCE4% ₹433 Cr 1,837,574 State Bank of India (Financial Services)
Equity, Since 31 May 06 | SBIN4% ₹425 Cr 7,685,639 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Jun 07 | HDFCBANK4% ₹424 Cr 2,641,521 Axis Bank Ltd (Financial Services)
Equity, Since 30 Sep 11 | 5322153% ₹392 Cr 4,492,332 Infosys Ltd (Technology)
Equity, Since 31 Mar 18 | INFY3% ₹388 Cr 2,531,001 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Mar 17 | BHARTIARTL3% ₹362 Cr 4,699,071
↑ 1,100,400
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.