Aditya Birla Sun Life Tax Relief ’96, earlier known as Birla Sun Life Tax Relief ’96, is a veteran of the ELSS category and since its launch in 1996, it has managed to weather multiple crises in India and abroad including but not limited to the dot com bust of 2000 and the relatively recent subprime crisis of 2008. This scheme’s AUM is among the largest in the category and the popularity of this Aditya Birla Sun Life ELSS fund even today is a testament to its consistent performance through the years.
Key Statistics about Aditya Birla Sun Life Tax Relief ’96*
|Fund Performance||1 Year||3 Year||5 Year|
*Data Source – Pulse Labs. All data as of October 2018
Key Details of Aditya Birla Sun Life Tax Relief ’96
The following are some of the key details about the Birla Tax Relief ’96 scheme as of October 2018:
- Inception – March, 1996
- AUM – Rs. 6627.64 crore
- Fund Managers – Ajay Garg
- Benchmark – S&P BSE 200 TRI
- Expense Ratio – 1.11% (direct)
- Minimum Investment Requirement – Rs. 500
Aditya Birla Sun Life Tax Relief ’96 Performance vs. Benchmark
This tax saver scheme from Aditya Birla Sun Life Mutual Fund has recorded 1 year, 3 year and 5 year returns of -4.05%, 10.78% and 19.08% respectively. For the same investment periods, the S&P BSE 200 Index (benchmark) posted returns of -0.98%, 10.67% and 13.76% respectively. It is evident that both the scheme and the benchmark have witnessed correction in the past year. This has impacted the scheme returns and led to underperformance vs. the benchmark in the short term. In the medium term, the scheme has managed to only slightly outperform its benchmark, but the outperformance is substantial for the longer term 5 year returns period. Thus, investors should consider staying invested in the scheme for the long term in order to derive the greatest benefit of the scheme. In fact the recent correction represents an opportunity for existing as well as new investors to purchase additional scheme units at cheaper valuations.
Asset allocation of Aditya Birla Sun Life Tax Relief ’96
Aditya Birla Sun Life Tax Relief ’96 may easily be considered as one of the most aggressive tax saver mutual funds in light of its exposure to mid and small cap company stocks that account for 47% and 11% of its portfolio respectively as of October 2018. This is substantially higher than the allocation by most of its category peers. That said, this tax saver scheme from Aditya Birla AMC also features substantial investments in large cap equities which accounted for an additional 39% of assets as of October 2018. The remaining 3% of scheme assets is invested in various cash and cash equivalent instruments. The high exposure to mid and small cap players can provide scheme investors with high return on investment during market bull runs however during market corrections, the scheme would potentially witness high levels of volatility. As a result, this scheme is possibly ideal only for investors with high risk tolerance who are seeking an aggressive equity investment with a long term investment horizon.
ABSL Tax Relief ’96 Asset Class-wise Investments Breakdown as of October 2018:
|Asset Class||Portfolio Allocation (% of total assets)|
|Large Cap Equities||39|
|Mid Cap Equities||47|
|Small Cap Equities||11|
|Cash/Cash Equivalent Instruments||3|
The following is a list of the top sectors that Birla Tax Relief ‘96 Fund is invested in as of October 2018:
|Investment Sector||% of Assets Allocated|
|Financial and Banking||18|
|Industrial Capital Goods||8|
The sector specific asset allocation of this scheme shows that the scheme has focused on consumption-based sectors such as financial/banking, consumer non-durables and automotive. Simultaneously, it has hedged it bets with substantial allocation to traditionally defensive sectors such as pharmaceuticals and petroleum products. The latter sectors have recently shows signs of revival both domestically as well as internationally which may help the scheme post high returns in the future.
Top Individual Holdings of Aditya Birla Sun Life Tax Relief ’96
The following are top 10 individual equity investments of the Birla Sun Life Tax Relief ’96*:
|Investment Name||Weight on Portfolio (%)|
|Honeywell Automation India||7.39|
|Thomas Cook (India)||4.53|
*Data as of October 2018.
Tax Benefits of Investments in Aditya Birla Sun Life Tax Relief ’96
ABSL Tax Relief ’96 is designated as an ELSS (equity linked savings scheme) or tax saver mutual fund. Thus investors of this scheme can look forward to tax deduction benefits of up to Rs. 1.5 lakh annually by investing in this scheme under currently applicable provisions of Section 80C of the Income Tax Act, 1961. You do need to keep in mind that your scheme units cannot be redeemed for a period of 3 years from the date of investments due to the lock-in period that is applicable to ELSS investments. Gains from the scheme are also tax free up to Rs. 1 lakh per fiscal. Gains over and above the Rs. 1 lakh limit are tax at 10%. Read more about taxation of mutual funds
Investment Facts about Aditya Birla Sun Life Tax Relief ’96
The following are some key facts that investors need to keep in mind when investing this ELSS from ABSL MF:
- Higher midcap allocations as compared to most category peers (major investment)
- Hedges risk to some extent through large cap allocations (minor investment)
- Focus on sectors that benefit from increased domestic consumption such as financials
- Small defensive allocation in sectors like pharmaceuticals
As a result of its aggressive investment approach and high allocation towards mid-cap equity investments, this scheme is recommended for highly risk tolerant investors if they are seeking a potentially high growth long term equity investment which simultaneously provides the benefit of tax savings.
Best Tax Saver Mutual Fund Schemes
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|ICICI Prudential Long Term Equity Fund|
|Motilal Oswal Long Term Equity Fund|
|Axis Long Term Equity Fund|
|SBI Magnum Tax Gain|
|Reliance Tax Saver Fund|