Birla Sun Life Tax Relief 96- D; an ELSS to watch

Investing in mutual funds for tax savings entails loads of benefits for investors willing to lock their investments for at least 3 years. Choosing a right ELSS becomes important as it may determine how fast investor's wealth grows. 

Birla Sun Life Tax Relief 96 -D  is a strong contender when it comes to being a top most performer in the category. The fund is managed by Ajay Garg and has Rs 1,965.96 crores of assets under management.

The fund with an expense ratio  of 1.75 has delivered 5.32 per cent over a 6 month period and 4.88 per cent returns over a 1 year period. On an annualised basis the returns have been 16.47 per cent for 2 years; for 3 years period the returns delivered are 26.32 per cent; and for a 5 year period the returns generated are 15.56 per cent. The historical returns reflect best in class returns for the said ELSS in the category.

The top holdings for the fund are Sundaram Clayton (7.1 per cent), Honeywell Automation India (5.9 per cent), ICRA (4.9 per cent), Bayer Cropscience (4.5 per cent) and Kotak Mahindra Bank Ltd (4.3 per cent). 

The fund has maximum exposure to Financial sector (27.6 per cent), and the rest are as follows: Automobiles (16.7 per cent), Consumer products (10.9 per cent), Industrials and Engineering (10.4 per cent), Consumer services (9 per cent) and Healthcare sector (8.4 per cent). 

The alpha for the fund stands at 8.88, suggesting a healthy out-performance or excess returns to the benchmark i.e S&P BSE 200 index. The Sharpe Ratio for the fund is 0.78. Positive Sharpe Ratio indicates higher risk adjusted returns. 

ELSS investors may look at Birla Sun Life Tax Relief 96- D fund for saving taxes as well as for growing their wealth in a systematic manner by adopting a Systematic Investment Plan (SIP).