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| How Mutual Fund NAV is calculated? Posted: 02 Nov 2012 10:47 AM PDT Call 0 94 8300 8300 (India)
An equity mutual fund invests the entire pool of money that it receives from various investors into different shares. The prices of these shares keep changing every day. This change in price of all the shares held by a fund is divided by the total number of units of the fund to arrive at the NAV. The fund expenses are deducted before the NAV is calculated. Hence, the NAV is the price of the mutual fund for its investors because the fund's units are bought and sold on the basis of its NAV.
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| Posted: 02 Nov 2012 07:22 AM PDT Call 0 94 8300 8300 (India) Tax-saving funds (also referred to as Equity Linked Savings Schemes - ELSS) are well suited for investors willing to take risk. However, at the same time it also provides an opportunity to create wealth in one's tax-saving portfolio. Moreover, the lock-in period of 3 Years encourages long-term investing, which is a pre-requisite for fruitful return on equity investments. A well managed tax-saving fund can serve a dual purpose i.e. provide tax benefits (under Section 80C of the Income Tax Act, 1961) and assist investors' to accumulate wealth over the long-term. But to do so, the key lies in selecting a well-managed tax-saving fund with a long term horizon. Kotak Tax Saver (KTS) is one such open-ended tax saving fund from the stable of Kotak Mutual Fund. KTS is primarily mandated to invest in equities and equity-related securities of Indian companies along with debt and money market instruments. Launched in November 2005, the fund has been in existence for more than 6 years now.
Investment Objective and Proposition
The fund's primary investment objective is "to generate long-term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. There is no assurance that the investment objective of the Scheme will be achieved."
Equity Portfolio
As indicated by the table above, KTS's top-10 equity portfolio constitutes of all 'A' group stocks. As on January 31, 2012 the fund held in all 62 stocks in portfolio out of which 'A' group stocks accounted for 75.8% and the rest 24.2% were the 'B' group ones. The fund holds a portfolio which is diversified across sectors and stocks. The top-10 stocks accounted for 39.7% of the portfolio while Top-5 sector concentration stood at 44.3% for its recent portfolio (i.e. as January 31, 2012). Being benchmarked against S&P CNX 500, the fund manager has moderately churned the portfolio as revealed by its portfolio turnover ratio of 1.35 times.
· The financial strength of the companies, as indicated by well recognised financial parameters;
· Reputation of the management and track record;
· Companies that are relatively less prone to recessions or cycles, either because of the nature of their businesses or superior strategies followed by their management;
· Companies which pursue a strategy to build strong brands for their products or services and those which are capable of building strong franchises;
· Market liquidity of the stock.
How KTS has fared vis-Ã -vis its peers?
The table above reveals that KTS's performance has not been very luring when compared to top performers in the category. Moreover, the fund has underperformed the benchmark index – S&P CNX 500 across time frames. It has clocked returns of 26.4% CAGR over the 3-Yr as against the 27.0% CAGR returns generated by S&P CNX 500 over the same time frame.
Fund Manager Profile
As seen above the performance of Kotak Tax Saver has been average. Over a 3-Yr time frame, the returns are mediocre as the fund fails to match even the category average returns. ----------------------------- Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) 1. ICICI Prudential Tax Plan Invest Online 2. HDFC TaxSaver Invest Online 3. DSP BlackRock Tax Saver Fund Invest Online 4. Birla Sun Life Tax Relief '96 Invest Online 5. Reliance Tax Saver (ELSS) Fund Invest Online 6. IDFC Tax Advantage (ELSS) Fund Invest Online 7. SBI Magnum Tax Gain Scheme 1993 Invest Online 8. Sundaram Tax Saver Invest Online Happy Investing!!
We can help. Call 0 94 8300 8300 (India)
Leave your comment with mail ID and we will answer them
OR
You can write back to us at PrajnaCapital [at] Gmail [dot] Com
---------------------------------------------
Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs
Download Mutual Fund Application Forms
Best Performing Mutual Funds
Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now  |
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