Last Updated on December 29, 2021 at 12:00 pm
This is a performance review of Mirae Asset Tax Saver Fund and a comparison with the most popular ELSS fund Axis Long Term Equity. If you are looking for an ELSS fund, rather if your portfolio needs an ELSS fund then Mirae Tax Saver might fit the bill. Sometimes, you need to choose mutual funds on instinct rather than fund performance.
Mirae Asset Tax Saver Fund was launched in Dec 2015. It is managed by Neelesh Surana who also manages their flagship Mirae Asset India Equity, Mirae Asser Emerging bluechip and Mirae Asset Hybrid fund which I recently reviewed. The tax saver fund has an Aum of about 1100+ Crores and has an impressive expense ratio of 0.36% for the direct plan. The investment strategy aims to hunt for growth stocks across the market cap. As required by the finance ministry, all ELSS funds should hold 80% equity at all times. Source: Scheme document
The reason I looked closer into this fund is due to this snapshot from Value Research.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
Notice how Axis Long Term Equity has the lion’s share of the AUM. That kind of herding is not healthy. This is one reason I chose Franklin Tax Shield to be part of My Handpicked Mutual Funds September 2018 (PlumbLine). It is a low volatile consistent performer. Mirae Tax Saver is an off-beat choice since it does not have much of a history. However, sometimes it is okay to make such decisions IMO. The fund house has a reputation for good performance; the fund manager is the same and ELSS fund is an essential category for all fund houses to attract young earners.
Do you need an ELSS Fund (does your portfolio need one)?
First of all, let us ask if your portfolio needs an ELSS fund. The key to investing is asset allocation. Regardless of your age, if your goal is more than ten years away, it would be prudent to hold 40% and fixed income in your portfolio and 60% in equity. This 40% can from your EPF or VPF or PPF (it can also be NPS with no equity).
- Now, if you can reach the 1.5L 80C limit just by investing 40% of your investments in fixed income, you do not need an ELSS fund
- For many young earners, if they invest 1.5L in fixed income, the asset allocation may exceed 40%. In my opinion, this is okay for the first few years of earning as long as there is a decent scope for income increase (so that more can be invested in equity down the line). For this situation also, I think there is no need for an ELSS fund.
- Only when 1.5L in fixed income would mean above 60% weight in the portfolio, an ELSS fund will be useful.
This review is meant only for those who are looking for a new ELSS fund to invest. If you already hold ELSS funds do not buy another!!
Mirae Asset Tax Saver Fund vs Axis Long Term Equity Fund
Since inception, the Mirae fund has beat both Nifty 200 TRI and the darling of ELSS investors, Axis Long Term Equity.
Of course, there is not much history to work with and it is not fair to say the Mirae fund is better than the Axis fund. At the very least Mirae Tax saver is not a bad choice. The two-year rolling returns of the two funds is shown below.
You can create such graphs for any two funds using this Fund A vs Fund B Rolling Returns Tool
Fingerprint Analysis of Mirae Asset Tax Saver Fund
We can look at the monthly returns of a mutual fund, compare it with its benchmark and evaluate performance in four bins as shown below.
Mirae Tax Saver Vs Nifty 200 TRI (since Dec 2015)
That is fairly decent.
Axis Long Term Equity vs Nifty 200 TRI (since Dec 2015)
The Axis fund also had a similar performance in the same period.
Mirae Asset Tax Saver vs Axis Long Term Equity (since Dec 2015)
Here we compare the two funds and outperform here means the Mirae ELSS fund outperforming the Axis ELSS fund.
So, again pretty good. You can create this kind of graphs for your fund with 72 benchmark indices with this tool: Fingerprinting: A Visual Tool for Analyzing Mutual Fund Performance
Video Version of the review
Summary
If you want to choose a fund far removed from where the crowd is investing, Mirae Asset Tax Saver is a decent choice IMO, IF your portfolio needs it (not you) and IF you do not already hold ELSS funds. The only obvious con that I can think of is performance dependence on the fund manager (too many Mirae Funds have the same manager). Since this is an off-beat choice as it is quite new, another less popular option is Franklin Tax Saver is a relatively low volatile consistent performer with a decent track record.
So will you choose this Mirae Fund? What other funds would you like reviewed?
Also check out yesterdays post: Holding too many mutual funds? Easily trim your portfolio with these simple steps The video version is now available
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! 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 you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
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 is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will 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
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This 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
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and 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 300 (instant download)