New Fund Offer - Bharti AXA Tax Advantage Fund

Bharti AXA Tax Advantage is the second equity fund launched by the new [INSERT_1]fund house.

Objective: Bharti AXA Tax Advantage is an open-ended, ELSS Fund which is multi-cap equity scheme that will be invested predominantly in a diversified portfolio of equity and equity-related securities that includes derivatives upto 50 per cent of the net asset. The scheme is entitled for deductions u/s 80C allowable to a maximum of Rs 1 lakh.

Strategy: The fund will first do the screening of all the stocks based on the qualitative as well as quantitative criteria. Then it will focus on the most attractive 150 stocks amongst the list and finally select the stocks for the portfolio on the basis of industry status, company competitive analysis and finally valuations.

Fund manager and AMC performance: Prateek Agrawal is the fund manager for this fund who was earlier associated with ABN AMRO AMC and SBI Capital Markets. At ABN he managed funds like Tax Advantage Plan, Sustainable Development Fund, Multi Manager Series 3 and 2B funds. However, two of these funds have underperformed as compared to its category returns.

While Bharti AXA AMC is still in its nascent stage, the only existing equity scheme, Bharti Axa Equity fund that was launched in September has collected merely around Rs 18 crore worth corpus. Secondly, the fund hasn’t managed to beat the category returns for a period of one month.

Suitability and Recommendation: Investment in the ELSS scheme is not only exempt from taxation but also locked in for 3 years period. Thus investors need to make a very vigilant attempt in selecting such funds. Thus investors who have tax liability should rather invest in the existing ELSS scheme like Sunderam BNP Taxsaver with good track record through SIP route and skip this fund.