When it comes to choosing a tax planning fund, Birla Sun life Tax Relief’96 is a good option to go with
A diversified equity fund with an investment philosophy to invest in quality companies is the hallmark of this fund. The fund manager invests in companies run by professional management, which have predictable earnings and strong economic moats. Investments are across market capitalisation, though there is a large-cap tilt, which helps in maintaining stability, even as the fund manager looks for opportunities in the mid and small-cap space.
Stocks such as Honeywell Automation, Gillette, and Pfizer among other indicate the moat approach and also preference to MNC stocks. Likewise, the presence of IndusInd Bank, Yes Bank stocks point towards a buy and hold approach. There is no preference to sectors, but stock selection is critical when it comes to investments in the fund.
Steady fund management, with fund manager Ajay Garg managing the fund for the past decade is evident in how the fund has held on to its own. A matter of concern is its inability to hold on during bear markets, which it amply compensates for with superior returns during bull runs. The three year lock-in with an ELSS helps the fund in its performance, which is what investors in tax planning funds expect. One could invest in this fund to save taxes and also build wealth.