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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 17, 2019 , 27 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
₹16.9407 ↓ -0.04   (-0.25 %)
₹1,512 on 30 Nov 18
13 Oct 14
Equity
ELSS
1
Moderately High
2.61
-0.42
-0.18
-15.19
Not Available
NIL
Principal Tax Savings Fund
Growth
Fund Details
₹200.82 ↓ -0.98   (-0.49 %)
₹379 on 30 Nov 18
31 Mar 96
Equity
ELSS
8
Moderately High
2.88
-0.51
0.29
-6.53
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
-0.1%
6.7%
0.3%
-8.2%
14.7%
0%
13.2%
Principal Tax Savings Fund
Growth
Fund Details
-1%
3.3%
-0.6%
-11.5%
16.9%
17.3%
16.1%

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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 Performance2017
2016
2015
2014
2013
Tata India Tax Savings Fund
Growth
Fund Details
-8.4%
46%
2.1%
13.3%
0%
Principal Tax Savings Fund
Growth
Fund Details
-9.2%
48.8%
6.2%
2.7%
49.4%

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 - 3.59 Yr.
Principal Tax Savings Fund
Growth
Fund Details
₹500
₹500
P.V.K. Mohan - 8.17 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 14₹10,530
31 Dec 15₹11,931
31 Dec 16₹12,187
31 Dec 17₹17,793
31 Dec 18₹16,302
Growth of 10,000 investment over the years.
Principal Tax Savings Fund
Growth
Fund Details
DateValue
31 Dec 13₹10,000
31 Dec 14₹14,945
31 Dec 15₹15,348
31 Dec 16₹16,298
31 Dec 17₹24,251
31 Dec 18₹22,021

Detailed portfolio Comparison

Asset Allocation
Tata India Tax Savings Fund
Growth
Fund Details
Asset ClassValue
Cash2.86%
Equity96.41%
Debt0.8%
Equity Sector Allocation
SectorValue
Financial Services41.2%
Consumer Cyclical15.5%
Consumer Defensive10.42%
Industrials9.22%
Technology7.36%
Health Care4.98%
Energy3.6%
Basic Materials3.42%
Real Estate0.7%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Nov 16 | ICICIBANK
9%₹145 Cr4,015,000
HDFC Bank Ltd (Financial Services)
Equity, Since 28 Feb 10 | HDFCBANK
8%₹119 Cr560,000
Axis Bank Ltd (Financial Services)
Equity, Since 31 Aug 18 | 532215
5%₹84 Cr1,360,000
↑ 260,000
State Bank of India (Financial Services)
Equity, Since 30 Nov 18 | SBIN
5%₹84 Cr2,830,000
↑ 790,000
Infosys Ltd (Technology)
Equity, Since 30 Sep 18 | INFY
4%₹67 Cr1,020,000
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 May 15 | KOTAKBANK
4%₹62 Cr495,000
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 17 | HDFC
4%₹61 Cr310,000
Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 18 | RELIANCE
4%₹56 Cr500,000
Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Jul 18 | TCS
3%₹47 Cr250,000
Havells India Ltd (Industrials)
Equity, Since 31 Aug 17 | 517354
3%₹45 Cr656,000
Asset Allocation
Principal Tax Savings Fund
Growth
Fund Details
Asset ClassValue
Cash3.27%
Equity97.21%
Equity Sector Allocation
SectorValue
Financial Services26.61%
Consumer Defensive12.95%
Basic Materials12.55%
Technology10.36%
Industrials9.28%
Consumer Cyclical9.24%
Utility6.78%
Health Care4.18%
Energy3.93%
Communication Services1.32%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 09 | HDFCBANK
5%₹19 Cr91,334
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK
5%₹18 Cr509,143
Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 08 | RELIANCE
4%₹15 Cr134,452
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 14 | TCS
3%₹13 Cr68,640
ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC
3%₹13 Cr455,396
Treps 01-Jan-2019
CBLO/Reverse Repo | -
3%₹12 Cr
Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 13 | LT
3%₹11 Cr77,262
Tata Power Co Ltd (Utilities)
Equity, Since 30 Nov 17 | 500400
3%₹11 Cr1,442,240
State Bank of India (Financial Services)
Equity, Since 30 Apr 05 | SBIN
3%₹11 Cr369,851
Infosys Ltd (Technology)
Equity, Since 31 Jan 09 | INFY
3%₹11 Cr161,594

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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