Birla Sun Life Tax Plan

A fund which has alternated between periods of exceptional and modest returns in the last 15 years, Birla Sun Life Tax Plan has shown a sharp improvement in its show in the last three years. Since 2011, the fund has shown an ability to outpace both its benchmark and category by big margins, earning it a four-star rating in 2015. The fund is managed in a growth style with a flexi-cap strategy, with tactical changes to market-cap weights based on markets.

Birla Sun Life Tax Plan's fifteen- year record looks patchy, but its five- year record compares extremely well to the category. The fund's one-, three- and five-year returns are among the highest in the ELSS category and have also beaten benchmarks by a big margin. This has helped lift its overall CAGR since launch to about 22 per cent. A look back at the past shows that the fund has fared very well in bull markets but has taken a hard knock in bear markets like those of 2001 and 2008. But it broke this pattern in 2011, doing better than its benchmark and category. Portfolio allocations show the fund to be more small-cap oriented than its peers, with a 15-22 per cent allocation to this segment. Large caps have made up to 50-60 per cent of the assets at most times. Small-cap stock choices, however, are far from risky and tilt towards engineering and auto-component MNCs, pharma, etc. The fund has a strong quality bias.

This fund is a good fit for tax-saving investors who seek high returns even if the ride is somewhat bumpy.