Best ELSS (Tax Saving) Mutual Fund to invest in 2010

If you are the one who’s still to invest for your tax saving this year or would like to start SIP for next finacial year, you got a few more Tax saving fund (ELSS) options. A few days back I posted the list of Best ELSS to invest for FY 2009-10.

In this post I would like to add two more funds to the list of 5 ELSS funds selected previously.

  1. Religare Tax Plan
  2. DSPBR Tax Saver

Here is a brief review of both the funds:

Religare Tax Plan:

Religare Tax Plan is a relatively new kid on the block, having just completed three years; we feel it has a good future. With a corpus of just over Rs100 crore and fund manager Vetri Subramaniam’s good track record, the fund did well in both the falling markets of 2008 and rising markets of 2009, despite having around 56% investments in mid- and small-sized companies.

The fund in the 3 month & above period has consistently outperformed its benchmark index S&P CNX Nifty, registering an annualised return of 20.53% in the last 3 years while in the stated period Nifty has given 12.47% return.

If the fund manager plays his cards well, the fund is set for a good run ahead. If you must invest in Religare, we suggest minimal exposure due to the presence of other long-term funds. But do keep it on your watch list.

DSPBR Tax Saver:

DSPBR Tax has a fund corpus of around Rs 750 crore and has done well in last three years of its existence. The fund in the 3 month & above period has consistently given an above average performance as compared to its peer group and has also outperformed its benchmark index (S&P CNX 500 Equity Index) in the stated period, registering an annualized return of 18.59% in the last 3 years while its benchmark could register a growth of 12.47%.

DSPBR follows a flexi-cap investment strategy — it invests in large- and mid- and even small-cap stocks, depending on the market fancy. Banking sector, a favored sector in the past rallies, does figure as the top sector even in the recent portfolio. Its Top 5 sector picks constitute both growth-oriented and defensive sectors.

The churning of stocks too is quite aggressive, with turnover ration of around 200% which may subject the fund to volatility in returns.

The other thing is DSP BR still doesn’t offer Online Investment Platform for investor which is a bit surprising and inconvenient.

For list of top ELSS funds for 2010 click here.

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