7 insights on the performance of Mirae Asset Tax Saver Fund in the Indian market

Tax Saver Mutual Funds, also known as Equity-Linked Savings Scheme (ELSS), are widely used investment options for taxpayers. These mutual funds can s

Tax Saver Mutual Funds, also known as Equity-Linked Savings Scheme (ELSS), are widely used investment options for taxpayers. These mutual funds can save up to 46,800 INR in tax benefit under section 80C for taxpayers upon investing 1.5 Lac INR. You can also choose to invest more than 1.5 Lac since tax saver funds not only save tax, they also build wealth by yielding great returns on investment. Tax saver funds also have a very low lock-in period starting from 3 years. Mirae Asset Tax Saver Fund has exceptional performance compared to other similar funds in the Indian market. The fund is much diversified and invests in equity shares of Large-Cap, Mid-Cap, and Small-Cap companies. You can start investing monthly with an amount as low as 500 INR and you can increase investment amount in multiples of 500 INR. Before we dive into the performance metrics of the Mirae Asset Tax Saver fund (MATS Fund), you can understand the fund’s portfolio by checking the investment holdings and other information below.

Fund Information:

Mirae Asset Tax Saver fund falls into the “Moderately High Risk” category, having the Benchmark as “IISL NIFTY 200 TR”. Total Assets under management (AUM) are 3281.5 Crore INR. The current expense ratio of the fund is 1.93%. The fund invests predominantly in equity and equity-related instruments. The investment objective of the MATS fund is to generate long-term capital appreciation through equity investments.

Investment Holdings:

The following are the current major holdings of MATS fund. 10% of the fund is invested in the equity of HDFC bank, making it the highest investment into a single company. 7% of the fund is invested in Reliance Industries, 5% is invested in both ICICI bank and Axis bank. And 4% is invested in State Bank of India.

Source: scripbox.com, observed on 13th April 2020.

Performance Insights on Mirae Asset Tax Saver Fund in the Indian market 

Asset Size:

Total Asset Size or AUM (Asset Under Management) of Mirae Asset Tax Saver fund is currently 3281 Crores INR, implying the trust of numerous investors in the fund. Based on Asset Size, MATS fund is in the top 25% of fast-growing funds available in the Indian market.

Investment Portfolio:

MATS fund’s investment portfolio includes 74% of giant and large-caps, 20% of mid-caps and 6% of small-caps. Industry-wise MATS invests 37% into bank and financial services equities, 11% into information Technology-based companies and industries, 9% into consumer Goods and 9% into oil, petroleum, and energy-based industries. The portfolio helped MATS fund to be one of the highest yielding tax saver funds.

Performance Ranking:

MATS fund is rated 5 stars on Moneycontrol.com, which tracks the performance of various tax saver funds. MATS is currently ranked in the top 10% of funds with a high 3 years annual return in India.

ROI and Dividends:

In 2016 MATS fund had an annual return of 14.8% compared to the benchmark return of 5% for the same year. Also, in 2017 the fund had a return of 47.88 %, significantly higher compared to the benchmark return of 35%. MATS fund offers both the Growth option and dividend payout option. The dividend payout from ELSS funds is tax-free.

Total Expense Ratio:

The expense ratio is the annual fee charged by the fund management company to the investor for managing the investments. It is an important parameter in an investor’s decision-making process, investors usually go for the funds with lower expense ratios to save costs. The expense ratio of MATS’ direct plan is 0.64%. An ELSS fund with an expense ratio below 1.5% is considered as a good investment opportunity. The regular plan offered by MATS fund has an expense ratio of 1.93%, it is subjected to vary based on market performance.

Fund Managers Expertise:

Fund Manager is the ultimate decision-maker and plays a crucial role in a fund’s performance. Investing being process-oriented, still, the approach varies based on the experience and strategy of the fund manager. Since its inception, Mirae Assets Tax Saver Fund has been managed by Mr. Neelesh Surana. His knowledge of equity markets paved the way for MATS fund to be a high yielding fund. Neelesh also manages a few of the biggest funds offered by Mirae Assets’ house.

Comparison with other Investment options:

The below table shows the difference in gains in each investment option. The last column represents the annualized average percentage of return, the last row represents the tax saver mutual fund. The calculation is done for a monthly investment of 10,000 INR for a tenure of 15 years. Equity-based mutual funds usually perform better than any other tax saving investment options. The total capital for each investment below is 18,00,000 INR. Mutual funds build a total corpus of INR 50,45,760 (280% of capital) at an annual growth rate of 12%, whereas PPF gives a corpus of INR 34,83,451 (193% of capital) at an annual growth rate of 8%. Mirae Assets Tax Saver Fund currently has an annual growth rate of +2.56% over the last 3 years, which is a lot higher than other funds available in the Indian market. 

Return on investment in various investment options. Source Scripbox.com.

Since its inception, the Mirae Asset Tax Saver fund has been performing in the top 10% of the available funds in the Indian market in terms of Asset growth and ROI. None of the ELSS schemes in the market guarantee or assure returns, investing in mutual funds is subjective to market risk. An investor needs to understand the market volatilities before investing.

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