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Fincash » Tata India Tax Savings Vs Principal Tax Savings Fund

Tata India Tax Savings Fund Vs Principal Tax Savings Fund

Updated on January 18, 2021 , 606 views

Tata India Tax Savings Fund and Principal Tax Savings Fund both the schemes are a part of the ELSS category of Mutual Funds. ELSS or Equity Linked Savings Scheme is a type of Mutual Fund that gives investors dual benefits of investing and tax Deduction. ELSS schemes predominantly invest their major stake of the fund money in equity and equity-related instruments. Individuals Investing in ELSS can claim a tax deduction of up to INR 1,50,000 under Sec. 80c of income tax Act, 1961. Being a tax saving instrument, ELSS has a lock-in period of three years. However, it is the shortest as compared to other tax saving avenues. Though both Tata India Tax Savings Fund and Principal Tax Savings Fund are a part of the same category, nevertheless; there are a number of differences between them. So, let’s have an in-depth understanding of these parameters.

About Tata India Tax Savings Fund

Tata India Tax Savings Fund is suitable for investors seeking appreciation in the Capital in medium to long-term horizon along with benefits of tax deduction. One of the advantages of Tata India Tax Savings Fund is it selects stocks that are fundamentally good by adopting a top-down and bottom-up approach. Tata India Tax Savings Fund, based on its Asset Allocation objective invests around 80-100% of its money in equity and equity-related instruments and the remaining in fixed Income and money market instruments. Mr. Rupesh Patel is the sole fund manager managing the Tata India Tax Savings Fund. This scheme of Tata Mutual Fund uses S&P BSE Sensex TRI as its base to build its basket of assets. Some of the top 10 constituents of Tata India Tax Savings Fund’s portfolio as on March 31, 2018, include HDFC Bank Limited, Kotak Mahindra Bank, Reliance Industries Limited, and Tata Motors Limited.

About Principal Tax Savings Fund

Principal Tax Savings Fund is offered and managed by Principal Mutual Fund. This scheme was incepted on March 31, 1996, and uses S&P BSE 200 Index as its benchmark to build its portfolio. Mr. P.V.K. Mohan is the fund manager managing the Principal Tax Savings Fund. The scheme aims at providing returns to its investors by way of capital appreciation. The objective of Principal Tax Savings Fund is to provide a high-quality growth-oriented portfolio that helps in attaining long-term Capital Gains to the investors. As per the asset allocation objective of Principal Tax Savings Fund, it invests a minimum of 80% of its pooled money in equity and equity-related instruments and a maximum of 20% of its pooled money in fixed income instruments.

Tata India Tax Savings Fund Vs Principal Tax Savings Fund

Though both Tata India Tax Savings Fund and Principal Tax Savings Fund both are a part of ELSS category, nevertheless; there differ on a number of parameters. So, let us understand the differences between these schemes by analyzing these parameters that are classified into four sections, listed below as follows.

Basics Section

Being the first section in the comparison, it includes parameters such as current NAV, scheme category, and Fincash Rating. To begin with the scheme category, it can be said that both the schemes are a part of Equity ELSS category. The comparison of Fincash Rating reveals that Tata India Tax Savings Fund is a 5-Star rated scheme and Principal Tax Savings Fund is a 4-Star rated scheme. However, there is a considerable difference in the NAV of both the schemes. As on May 02, 2018, the NAV of Tata India Tax Savings Fund is approximately INR 17 and of Principal Tax Savings Fund is around INR 219. The comparison of basics section is 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
Tata India Tax Savings Fund
Growth
Fund Details
₹22.6463 ↑ 0.19   (0.85 %)
₹2,481 on 31 Dec 20
13 Oct 14
Equity
ELSS
1
Moderately High
1.97
0.38
-1.18
-4.32
Not Available
NIL
Principal Tax Savings Fund
Growth
Fund Details
₹259.76 ↑ 2.09   (0.81 %)
₹485 on 31 Dec 20
31 Mar 96
Equity
ELSS
8
Moderately High
2.56
0.56
-1.27
1.2
Not Available
NIL

Performance Section

It is the second section in the comparison that analyzes the differences in the CAGR or Compounded Annual Growth Rate of both the schemes. These CAGR returns are compared at different time intervals such as 1 Month Return, 6 Month Return, 3 Year Return, and Return since Inception. The comparison of performance section states that, in many instances, Principal Tax Savings Fund leads the race. The table given below summarizes the comparison of performance section.

Parameters
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
Tata India Tax Savings Fund
Growth
Fund Details
6.7%
22.2%
32.1%
16.5%
6.8%
15.1%
13.9%
Principal Tax Savings Fund
Growth
Fund Details
7%
25.6%
34.4%
23.4%
4.4%
15.7%
15.9%

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Yearly Performance Section

This section compares the absolute returns generated by both the schemes for a particular year. The comparison of yearly performance section in certain years, Tata India Tax Savings Fund leads the race while for others, Principal Tax Savings Fund leads the race. The summary comparison of the absolute returns is summarized as follows.

Parameters
Yearly Performance2020
2019
2018
2017
2016
Tata India Tax Savings Fund
Growth
Fund Details
11.9%
13.6%
-8.4%
46%
2.1%
Principal Tax Savings Fund
Growth
Fund Details
18.9%
2.5%
-9.2%
48.8%
6.2%

Other Details Section

It is the last section in the comparison and includes parameters such as AUM, exit load, minimum SIP investment, and minimum lumpsum investment. The minimum SIP and lumpsum investment are same for both the schemes, that is, INR 500. With respect to the exit load, there is no exit load on both the schemes, as they are ELSS based schemes. However, both the schemes differ significantly on account of AUM. The AUM of Tata Mutual Fund’s scheme was around INR 1,267 Crores while of Principal Mutual Fund’s scheme was nearly INR 375 Crores as of March 31, 2018. The other details section is tabulated as follows.

Parameters
Other DetailsMin SIP Investment
Min Investment
Fund Manager
Tata India Tax Savings Fund
Growth
Fund Details
₹500
₹500
Rupesh Patel - 5.76 Yr.
Principal Tax Savings Fund
Growth
Fund Details
₹500
₹500
Sudhir Kedia - 1.18 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
Tata India Tax Savings Fund
Growth
Fund Details
DateValue
31 Dec 15₹10,000
31 Dec 16₹10,214
31 Dec 17₹14,913
31 Dec 18₹13,663
31 Dec 19₹15,520
31 Dec 20₹17,364
Growth of 10,000 investment over the years.
Principal Tax Savings Fund
Growth
Fund Details
DateValue
31 Dec 15₹10,000
31 Dec 16₹10,619
31 Dec 17₹15,801
31 Dec 18₹14,348
31 Dec 19₹14,703
31 Dec 20₹17,481

Detailed portfolio Comparison

Asset Allocation
Tata India Tax Savings Fund
Growth
Fund Details
Asset ClassValue
Cash1.3%
Equity98.7%
Equity Sector Allocation
SectorValue
Financial Services35.17%
Technology12.57%
Energy11.43%
Health Care10.78%
Consumer Cyclical9.28%
Industrials6.98%
Basic Materials5.52%
Communication Services4.73%
Consumer Defensive1.51%
Real Estate0.73%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Infosys Ltd (Technology)
Equity, Since 30 Sep 18 | INFY
10%₹237 Cr1,890,000
↓ -80,000
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Nov 16 | ICICIBANK
9%₹219 Cr4,100,000
HDFC Bank Ltd (Financial Services)
Equity, Since 28 Feb 10 | HDFCBANK
9%₹215 Cr1,500,000
Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 18 | RELIANCE
9%₹212 Cr1,070,000
↓ -130,000
State Bank of India (Financial Services)
Equity, Since 30 Nov 18 | SBIN
6%₹146 Cr5,325,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 17 | HDFC
5%₹120 Cr470,000
Bharti Airtel Ltd (Communication Services)
Equity, Since 30 Sep 19 | BHARTIARTL
5%₹117 Cr2,300,000
↑ 200,000
Axis Bank Ltd (Financial Services)
Equity, Since 31 Aug 18 | 532215
4%₹99 Cr1,600,000
Divi's Laboratories Ltd (Healthcare)
Equity, Since 30 Sep 17 | DIVISLAB
3%₹73 Cr190,000
↓ -10,000
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 May 15 | KOTAKBANK
3%₹72 Cr360,000
Asset Allocation
Principal Tax Savings Fund
Growth
Fund Details
Asset ClassValue
Cash0.32%
Equity99.68%
Equity Sector Allocation
SectorValue
Financial Services36.51%
Technology11.27%
Health Care9.37%
Industrials9.34%
Consumer Defensive8.44%
Energy6.69%
Consumer Cyclical5.84%
Basic Materials5.21%
Communication Services3.04%
Utility2.33%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK
10%₹48 Cr893,418
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 09 | HDFCBANK
8%₹41 Cr286,001
Infosys Ltd (Technology)
Equity, Since 31 Jan 09 | INFY
5%₹24 Cr190,534
↑ 12,970
Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 08 | RELIANCE
4%₹20 Cr98,359
Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 13 | LT
4%₹19 Cr144,140
State Bank of India (Financial Services)
Equity, Since 30 Apr 05 | SBIN
4%₹17 Cr624,330
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | KOTAKBANK
3%₹17 Cr84,321
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 14 | TCS
3%₹16 Cr54,301
↓ -5,080
Bharti Airtel Ltd (Communication Services)
Equity, Since 30 Nov 18 | BHARTIARTL
3%₹15 Cr289,755
Axis Bank Ltd (Financial Services)
Equity, Since 30 Sep 17 | 532215
3%₹14 Cr230,175

Therefore, from the above pointers, it can be said that both the schemes differ on numerous parameters though they form part of the same category. Resultantly, individuals should be careful while choosing any of the schemes for investment. They should check whether the scheme suits their investment objective or not. They should also understand its functioning completely. If required, the opinion of a financial consultant can also be taken. These steps will help ensure that individuals attain their objectives on time and in a hassle-free manner.

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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