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Fincash » L&T Tax Advantage Vs SBI Magnum Tax Gain Fund

L&T Tax Advantage Fund Vs SBI Magnum Tax Gain Fund

Updated on July 10, 2019 , 61 views

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

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

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 Vs SBI Magnum Tax Gain Fund

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.

Basics 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
BasicsNAV
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
₹53.418 ↑ 0.09   (0.17 %)
₹3,322 on 30 Apr 19
27 Feb 06
Equity
ELSS
7
Moderately High
2.61
-0.68
-0.43
-12.56
Not Available
NIL
SBI Magnum Tax Gain Fund
Growth
Fund Details
₹140.991 ↑ 0.19   (0.13 %)
₹7,027 on 30 Apr 19
7 May 07
Equity
ELSS
31
Moderately High
3.02
-0.16
-1.59
-2.95
Not Available
NIL

Performance Section

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
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
L&T Tax Advantage Fund
Growth
Fund Details
-2%
-0.2%
2.3%
-4.3%
9.4%
11.7%
13.4%
SBI Magnum Tax Gain Fund
Growth
Fund Details
-2.2%
-2.9%
1.8%
3.7%
6.7%
8.9%
9.8%

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Yearly Performance Section

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 Performance2018
2017
2016
2015
2014
L&T Tax Advantage Fund
Growth
Fund Details
-8.1%
42.3%
8.1%
2.9%
44.8%
SBI Magnum Tax Gain Fund
Growth
Fund Details
-8.3%
33%
2.1%
3.2%
49.1%

Other Details Section

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 DetailsMin SIP Investment
Min Investment
Fund Manager
L&T Tax Advantage Fund
Growth
Fund Details
₹500
₹500
S.N. Lahiri - 6.19 Yr.
SBI Magnum Tax Gain Fund
Growth
Fund Details
₹500
₹500
Dinesh Balachandran - 2.64 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
L&T Tax Advantage Fund
Growth
Fund Details
DateValue
30 Jun 14₹10,000
30 Jun 15₹11,916
30 Jun 16₹12,499
30 Jun 17₹15,824
30 Jun 18₹17,228
30 Jun 19₹17,172
Growth of 10,000 investment over the years.
SBI Magnum Tax Gain Fund
Growth
Fund Details
DateValue
30 Jun 14₹10,000
30 Jun 15₹12,259
30 Jun 16₹12,042
30 Jun 17₹14,208
30 Jun 18₹14,380
30 Jun 19₹15,283

Detailed portfolio Comparison

Asset Allocation
L&T Tax Advantage Fund
Growth
Fund Details
Asset ClassValue
Cash3.2%
Equity96.9%
Equity Sector Allocation
SectorValue
Financial Services34.34%
Technology12.14%
Basic Materials11.26%
Consumer Cyclical11.19%
Industrials9.42%
Health Care7.67%
Energy4.71%
Communication Services2.75%
Consumer Defensive2.41%
Utility1%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | ICICIBANK
6%₹220 Cr5,184,600
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 06 | HDFCBANK
6%₹218 Cr897,300
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Jun 09 | TCS
4%₹151 Cr689,300
↑ 44,800
Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 18 | RELIANCE
4%₹134 Cr1,004,100
Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 06 | LT
3%₹117 Cr753,000
(A) Tri Party Repo Dealing System (Treps)
CBLO/Reverse Repo | -
3%₹110 Cr
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 May 17 | HDFC
3%₹107 Cr492,400
↓ -56,600
Future Retail Ltd (Consumer Cyclical)
Equity, Since 31 Aug 16 | FRETAIL
3%₹107 Cr2,386,000
RBL Bank Ltd (Financial Services)
Equity, Since 31 Mar 19 | RBLBANK
3%₹106 Cr1,540,700
↑ 50,000
Axis Bank Ltd (Financial Services)
Equity, Since 31 May 17 | 532215
3%₹105 Cr1,293,000
Asset Allocation
SBI Magnum Tax Gain Fund
Growth
Fund Details
Asset ClassValue
Cash3.88%
Equity96.12%
Equity Sector Allocation
SectorValue
Financial Services34.22%
Industrials15.51%
Basic Materials9.27%
Consumer Defensive8.97%
Technology7.2%
Health Care5.44%
Energy4.19%
Communication Services3.87%
Consumer Cyclical3.82%
Utility3.62%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 17 | ICICIBANK
6%₹436 Cr10,282,843
ICICI Prudential Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 16 | ICICIPRULI
5%₹351 Cr9,053,525
HDFC Bank Ltd (Financial Services)
Equity, Since 30 Jun 07 | HDFCBANK
5%₹346 Cr1,425,865
Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 07 | LT
5%₹326 Cr2,091,500
↑ 500,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 07 | HDFC
4%₹318 Cr1,457,436
↑ 538,436
Treps
CBLO/Reverse Repo | -
4%₹311 Cr
State Bank of India (Financial Services)
Equity, Since 31 May 06 | SBIN
4%₹284 Cr8,060,233
Infosys Ltd (Technology)
Equity, Since 31 Mar 18 | INFY
4%₹273 Cr3,700,000
↓ -500,000
Axis Bank Ltd (Financial Services)
Equity, Since 30 Sep 11 | 532215
4%₹272 Cr3,364,199
ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC
4%₹258 Cr9,255,864
↓ -1,150,000

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.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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