Fincash » Tata India Tax Savings Fund Vs L&T Tax Advantage Fund
Table of Contents
There are a number of differences between Tata India Tax Savings Fund and L&T Tax Advantage Fund. These differences are present in spite of both the schemes being part of ELSS category of Equity Funds. ELSS or Equity Linked Savings Schemes are the Mutual Fund schemes that invest a predominant stake of their corpus in equity and equity-related instruments of various companies. By Investing in ELSS, individuals can enjoy dual benefits of investment as well as tax deductions. By investing in ELSS, individuals can claim up to INR 1,50,000 as a tax Deduction under Section 80C of income tax Act, 1961. Being a Tax Saving Investment avenue, ELSS has a lock-in period of up to 3 years. So, let us understand the differences between Tata India Tax Savings Fund and L&T Tax Advantage Fund through this article.
Tata India Tax Savings Fund is a part of Tata Mutual Fund and was launched in the year 2006. The objective of this scheme is to always emphasize the importance of long-term Capital appreciation along with Income distribution in medium to long-term. Some of the key attributes of Tata India Tax Savings Fund are tax-free growth potential of the savings and take advantage of a Portfolio of fundamentally good stocks. These stocks are selected using a top-down and bottom-up approach. Mr. Rupesh Patel is the sole fund manager managing Tata India Tax Savings Fund. Based on the Asset Allocation of the scheme, it invests around 80-100% of its accumulated fund money in equity and equity-related instruments while the remaining in Fixed Income and money market instruments. Tata India Tax Savings Fund uses S&P BSE Sensex TRI as its benchmark to construct its portfolio.
L&T Tax Advantage Fund is an open-ended ELSS scheme managed by L&T Tax Advantage Fund. This scheme was launched on February 27, 2006, and its objective is to invest its fund money primarily in diversified equity and equity-related securities and generate long-term capital growth through it. L&T Tax Advantage Fund uses S&P BSE 200 TRI Index as a base to build its portfolio. Some of the benefits of L&T Tax Advantage Fund is 360-degree approach and greater diversification of risk control. In normal circumstances, L&T Tax Advantage Fund invests around 95% of its corpus in equity and equity-related instruments while the remaining in money Market and fixed income securities. Mr. S. N. Lahiri is the sole fund manager of L&T Tax Advantage Fund.
Though Tata India Tax Savings Fund and L&T Tax Advantage Fund belong to the same category of equity funds, nevertheless; there are numerous differences between them. So, let us understand these differences between them that are classified into four sections, namely, basics section, performance section, yearly performance section, and other details section.
Being the first section in the comparison, it analyses parameters such as Current NAV, scheme category, and Fincash Rating. With respect to Fincash Rating, it can be said that Tata India Tax Savings Fund is rated as 5-Star and L&T Tax Advantage Fund is rated as 4-Star. The current NAV of both the schemes shows a significant difference between them. As on April 26, 2018, the NAV of Tata India Tax Savings Fund was approximately INR 17 and of L&T Tax Advantage Fund was approximately INR 56. With respect to scheme category, it can be said that both the schemes belong to the category of Equity ELSS. The table given below shows the summary comparison of the basics section.
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 Tata India Tax Savings Fund
Growth
Fund Details ₹34.7844 ↑ 0.38 (1.12 %) ₹3,478 on 31 Oct 23 13 Oct 14 ☆☆☆☆☆ Equity ELSS 1 Moderately High 1.75 0.25 -0.16 -0.4 Not Available NIL L&T Tax Advantage Fund
Growth
Fund Details ₹96.4545 ↑ 0.57 (0.60 %) ₹3,191 on 31 Oct 23 27 Feb 06 ☆☆☆☆ Equity ELSS 7 Moderately High 1.98 0.35 -0.69 0.76 Not Available NIL
It is the second section in the comparison of the schemes. This section compares the Compounded Annual Growth Rate or CAGR returns of both the schemes at different time intervals. Some of these intervals include 3 Month Return, 6 Month Return, 1 Year Return, and 5 Year Return. The comparison of CAGR returns reveals that in many instances, L&T Tax Advantage Fund leads the race. The summary comparison of the performance section is tabulated as follows.
Parameters Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch Tata India Tax Savings Fund
Growth
Fund Details 6.3% 4.1% 15% 12.4% 19.5% 15.5% 14.5% L&T Tax Advantage Fund
Growth
Fund Details 7.7% 5.9% 13% 17% 17.3% 12.4% 13.6%
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Being the third section, it analyzes the difference in the absolute returns generated by both the schemes for a particular year. The comparison of absolute returns shows that for certain years Tata India Tax Savings Fund leads the race while in others L&T Tax Advantage Fund leads the race. The table given below shows the summarized comparison of the absolute returns.
Parameters Yearly Performance 2022 2021 2020 2019 2018 Tata India Tax Savings Fund
Growth
Fund Details 5.9% 30.4% 11.9% 13.6% -8.4% L&T Tax Advantage Fund
Growth
Fund Details -3% 30.3% 13.5% 4.6% -8.1%
The parameters that form part of this last section include AUM, minimum SIP investment, and minimum lumpsum investment. With respect to the minimum SIP and lumpsum investment, it can be said that the amount is same for both the schemes, that is, INR 500. However, there is a difference in the AUM of both the schemes. For Tata India Tax Savings Fund, the AUM is approximately INR 1,267 Crores and for L&T Tax Advantage Fund is approximately INR 3,016 Crores as on March 31, 2018. The performance of other details section is tabulated as follows.
Parameters Other Details Min SIP Investment Min Investment Fund Manager Tata India Tax Savings Fund
Growth
Fund Details ₹500 ₹500 Sailesh Jain - 1.87 Yr. L&T Tax Advantage Fund
Growth
Fund Details ₹500 ₹500 Gautam Bhupal - 0.93 Yr.
Tata India Tax Savings Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 30 Nov 18 ₹10,000 30 Nov 19 ₹11,477 30 Nov 20 ₹12,029 30 Nov 21 ₹16,271 30 Nov 22 ₹18,279 30 Nov 23 ₹20,541 L&T Tax Advantage Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 30 Nov 18 ₹10,000 30 Nov 19 ₹10,318 30 Nov 20 ₹11,115 30 Nov 21 ₹14,667 30 Nov 22 ₹15,337 30 Nov 23 ₹17,946
Tata India Tax Savings Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 4.98% Equity 95.02% Equity Sector Allocation
Sector Value Financial Services 32.81% Industrials 16% Consumer Cyclical 11.64% Technology 8.64% Basic Materials 5.92% Communication Services 4.65% Energy 4.44% Health Care 4.13% Utility 3.05% Consumer Defensive 2.27% Real Estate 1.47% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 28 Feb 10 | HDFCBANK9% ₹319 Cr 2,160,000 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Nov 16 | ICICIBANK6% ₹213 Cr 2,325,000 Infosys Ltd (Technology)
Equity, Since 30 Sep 18 | INFY5% ₹159 Cr 1,160,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 18 | RELIANCE4% ₹154 Cr 675,000 State Bank of India (Financial Services)
Equity, Since 30 Nov 18 | SBIN4% ₹141 Cr 2,500,000 Axis Bank Ltd (Financial Services)
Equity, Since 31 Aug 18 | 5322154% ₹128 Cr 1,300,000 Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Nov 16 | LT3% ₹103 Cr 352,147 Bharti Airtel Ltd (Communication Services)
Equity, Since 30 Sep 19 | BHARTIARTL2% ₹86 Cr 940,000 NTPC Ltd (Utilities)
Equity, Since 30 Jun 21 | 5325552% ₹81 Cr 3,451,000 Radico Khaitan Ltd (Consumer Defensive)
Equity, Since 30 Jun 22 | RADICO2% ₹79 Cr 650,000 L&T Tax Advantage Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 1.45% Equity 98.55% Equity Sector Allocation
Sector Value Financial Services 29.34% Industrials 21.37% Consumer Cyclical 18.19% Technology 14% Health Care 5.01% Consumer Defensive 4.9% Energy 3.24% Basic Materials 1.98% Real Estate 0.52% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 06 | HDFCBANK7% ₹213 Cr 1,445,300
↓ -161,900 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Jul 22 | LT5% ₹168 Cr 574,100 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | ICICIBANK5% ₹166 Cr 1,811,100 KPIT Technologies Ltd (Technology)
Equity, Since 30 Sep 21 | KPITTECH4% ₹129 Cr 1,059,800 Cholamandalam Investment and Finance Co Ltd (Financial Services)
Equity, Since 31 Dec 21 | CHOLAFIN4% ₹127 Cr 1,114,400 Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 21 | RELIANCE3% ₹103 Cr 451,600 Persistent Systems Ltd (Technology)
Equity, Since 31 Jul 21 | PERSISTENT3% ₹101 Cr 163,900 CG Power & Industrial Solutions Ltd (Industrials)
Equity, Since 30 Apr 22 | 5000933% ₹97 Cr 2,486,300 Indian Hotels Co Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | 5008503% ₹86 Cr 2,251,800 Infosys Ltd (Technology)
Equity, Since 31 Mar 06 | INFY3% ₹85 Cr 622,100
Therefore, it can be said that both the schemes differ on account of numerous parameters. As a consequence, individuals should be very careful before investing in any of the schemes. They should analyze whether the scheme in which they are planning to invest matches their investment objective or not. They should also understand the scheme’s modalities completely. This will help them to attain their objectives on time and in a hassle-free manner.