Aditya Birla Sun Life Tax Relief 96 Fund Review: A smart choice to save tax

Published: May 19, 2019 at 10:35 am

This is a performance of Aditya Birla Sun Life Tax Relief 96 Fund, an ELSS mutual fund that qualifies for tax saving under section 80 C. In Jan 2019, I had featured this as one among the seven consistent ELSS performers Let us take an in-depth look at its performance.

Started in 1996 as a closed-ended fund, it became open-ended in 1999. However is NAV history is only available from March 2008 at both AMFI and the AMC site, I wonder why. At some point, I recall ABSL having three ELSS fund, one their own and two from other AMC acquisitions (or is two?). In any case, we do know for sure that Aditya Birla Sun Life Tax Plan was merged with Aditya Birla Sun Life Tax Relief 96 in May 2018. I have assumed here Tax Relief 96 is ABSL’s original ELSS offering. Please correct me if I am wrong. We need a dedicated mutual fund history page.

All ELSS funds should maintain 80% of stocks in their portfolio as per finance ministry regulation. There are more unusual aspects of these funds due to the tax benefits and lock-in of three years: Five Interesting Facts about ELSS Mutual Funds

Aditya Birla Sun Life Tax Relief 96 Fund Review A smart choice to save tax

Aditya Birla Sun Life Tax Relief 96 combines a top-down and bottom-up approach for stock selection. That is, it will not only choose profitable companies with a competitive advantage (bottom-up) but also consider macroeconomic factors, government policy etc (top-down) for portfolio construction.


Aditya Birla Sun Life Tax Relief 96 vs Nifty LargeMidcap 250: May 2019

Using the May 2019 Equity Mutual Fund Performance Screener, we can compare the Tax relief 96’s performance with Nifty Large Midcap 250. This index is a 50:50 mix of NIfty 100 and Nifty Midcap 150 indices. The fund has a benchmark of BSE 200. This (or is NSE equivalent NSE200) is fairly easy to beat. This is due to the market cap weighting of the index stocks. So the stocks with the top weight in Nifty 50 will also occupy the top spot in Nifty 200.  You can clearly see that in the picture below where 283 10-year returns (in each coloured lined) is plotted. This is the main reason I prefer Nifty LargeMidcap 250 to Nifty 200 for comparing ELSS, Multicap and Large and Midcap funds.

Nifty 200 vs Nifty 50 vs Nifty Largemidcap 250Aditya Birla Sun Life Tax Relief 96 Fund has a good long-term track return record against all these indices. Notice how the quantum of outperformance has decreased remarkably when the benchmark is changed from NSE 200 to NSE LargeMidcap 250.

Aditya Birla Sun Life Tax Relief 96 Fund vs bemchmark indices ten year rolling returnIn term of risk, Aditya Birla Sun Life Tax Relief 96 is less volatile than NSE 200 or Nifty 50 and comparable to Nifty Large Midcap 250.

Aditya Birla Sun Life Tax Relief 96 Fund vs bemchmark indices ten year rolling riskIndex fund naysayers must recognise that a simple 50:50 blend of a large cap and midcap index is able to match the performance of one the consistent performers in the ELSS categories. Not just recently but since April 2006.

Screener Results for Aditya Birla Sun Life Tax Relief 96

Aditya Birla Sun Life Tax Relief ’96 – Growth – Direct Plan is the only ELSS fund (and plan) to have beat the NiftyLargeMidcap250 Index 70% of the time or more, over 1,2,3,4 and 5 years! Also, in the  May 2019 Active Mutual Fund Performance Report only 8/31 funds qualified for risk, reward performance consistency over 5 years. This fund is one of them. The full stats are given below.

No of rolling return entries Index (1 Year)1318
No of rolling return entries Fund (1 year)1318
No of times fund has outperformed index (1 year)964
rolling return outperformance Consistency Score (1 year)73%
No of rolling return entries Index (2 Years)1070
No of rolling return entries Fund (2 years)1070
No of times fund has outperformed index (2 years)777
rolling return outperformance Consistency Score (2 years)73%
No of rolling return entries Index (3 Years)824
No of rolling return entries Fund (3 years)824
No of times fund has outperformed index (3 years)752
rolling return outperformance Consistency Score (3 years)91%
No of rolling return entries Index (4 Years)579
No of rolling return entries Fund (4 years)579
No of times fund has outperformed index (4 years)576
rolling return outperformance Consistency Score (4 years)99%
No of rolling return entries Index (5 Years)337
No of rolling return entries Fund (5 years)337
No of times fund has outperformed index (5 years)337
rolling return outperformance Consistency Score (5 years)100%

This fund also has acceptable downside protection consistency. That is when the index falls, it tends to fall less.

downside protection consistency (1 year)58%
downside protection consistency (2 years)68%
downside protection consistency (3 years)73%
downside protection consistency (4 years)76%
downside protection consistency (5 years)94%

It is also one of the rare funds to have a good upside performance consistency too! When the index moves up, it tends to move up higher.

upside performance consistency (1 years)46%
upside performance consistency (2 years)85%
upside performance consistency (3 years)83%
upside performance consistency (4 years)97%
upside performance consistency (5 years)100%

Summary

I think Aditya Birla Sun Life Tax Relief 96 Fund is an excellent choice of saving tax IF, repeat IF you want such benefits Remember there is no need to for ELSS funds. You can use EPF + VPF, PPF, mandatory NPS, expenses like life insurance, tuition fee for kids and home loan EMI (as applicable). Read more:  Making the best use of section 80C for tax saving: an example

If in spite of all this, you still feel the itch to buy ELSS funds, you can consider this. However do not fall prey to the distributor mis-sell that ELSS mutual fund performance is linked to the lock-in of the fund: The Myth About ELSS Fund Lock-in

Do share if you found this useful

We now publish both equity fund and debt fund (+ hybrid fund) screeners each month!
Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video!  More than 415 investors and advisors use this!
Unlock the secrets of successful financial advisors and entrepreneurs with our new course!
My new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Did you know? We have more than 1000+ videos on YouTube to explore! Join our YouTube Community!

Join our courses in exclusive Facebook Groups!

  • 550+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
  • Goal-based portfolio management! Join 2220+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content)  in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps