Top Tax Saving Mutual Funds in 2021

Published on: Jan. 3, 2021, 12:52 p.m.| Last on Updated : Jan. 4, 2021, 6:31 a.m. UTC TIME ZONE

Summary


The season of tax-saving has started, those who planned in advance are already investing in tax saving mutual funds. For those who are still waiting and have not identified funds, this article is for them.


The season of tax-saving has started, those who planned in advance are already investing in tax saving mutual funds. For those who are still waiting and have not identified funds, this article is for them. Top seven tax saving funds are listed below. Table 1 shows the key parameters of these funds. Detail discussion of each fund is done after the table 1.

Date of analysis 31 December 2020.

Top Tax Saving Mutual Funds in 2021

  1. Union Long Term Equity Fund
  2. BNP Paribas Long Term Equity Fund
  3. Invesco India Tax Plan
  4. Taurus Tax Shield
  5. UTI Long Term Equity Fund (Tax Saving)
  6. AXIS LONG TERM EQUITY FUND
  7. Canara Robeco Equity Tax saver Fund

 

Table 1: Key Parameters Top 7 Tax Saving Funds in 2021
Fund Name BMSMoney Perfor. Rank Median 1 Year Rolling Return % Median 1 Year Rolling Return Rank Drawdown % 1 Year Historical VaR % STD Dev. % Sharpe Ratio %
Union Long Term Equity Fund 1 4.46 5.00 -25.74 -21.38 21.63 11.08
BNP Paribas Long Term Equity Fund 2 4.68 4.00 -23.52 -20.25 19.37 4.89
Invesco India Tax Plan 3 3.59 7.00 -25.48 -24.27 22.02 12.60
Taurus Tax Shield 4 2.48 14.00 -26.77 -23.96 20.58 5.05
UTI Long Term Equity Fund (Tax Saving) 5 2.79 11.00 -27.47 -23.84 22.33 6.70
AXIS LONG TERM EQUITY FUND 6 3.77 6.00 -23.29 -22.57 21.15 29.41
Canara Robeco Equity Tax saver Fund 7 9.82 1.00 -22.07 -26.85 21.06 32.77
Union Long Term Equity Fund
Positive Aspects
  1. Union Long Term Equity Fund has a higher one-year rolling return (4.46%) compared to the category average (1.01%). The fund has generated 3.45% more return compared to the category average.
  2. The fund has generated higher one-quarter rolling return (8.63%) compared to the category average (7.88%). The fund has generated a 0.75% extra return compared to the category average one-quarter rolling return.
  3. One month rolling return  (4.4%) of the fund is more than the category average (3.81%). The fund has generated a 0.59% extra return in the one-month rolling period compared to the category average.
  4. One year rolling return rank of the fund is 5 out of 37 funds in the category. A high one-year rolling return ranking of the fund shows the superior performance of the fund.
  5. One month, one quarter and one-year rolling return, all three are more than the category average rolling return.
  6. The maximum drawdown of the fund is -25.74%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  7. One year historical VaR (p95%) of the fund is (-21.38%).  The category average one-year historical VaR is -24.8%. The fund has lower VaR compared to the category average VaR that shows a lower risk of the fund.
  8. One year standard deviation of the fund is (21.63%) that is less than the category average one-year standard deviation of 22.34%.
  9. One year semi deviation of the fund 16.47% is less compared to the category average one-year semi deviation of 17.26%. This shows a lower risk of the fund compared to the category average risk.
  10. Sharpe ratio (11.08)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  11. Calmar ratio 32.61% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  12. The sterling ratio of  23.49% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  13. Burke ratio (150.96)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  14. Jensen's alpha of the fund is 0.66% whereas the category average Jensen's alpha is -3.23%. Jensen's alpha of the fund is more than the category average and zero that shows the superior performance of the fund.
  15. The M2 of the fund is 8.84% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  16. The Sortino ratio of the fund is 8.69% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  17. The Treynor ratio of the fund is 2.55% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
Conclusion

Union Long Term Equity Fund performance has 17 positive aspects and 0 negative aspects. The performance score of the fund is 99.97. The fund is ranked 1 out of 37 funds in ELSS Fund category based on performance score. The performance score of the fund puts it at the top 15% of the funds in the category.

 

BNP Paribas Long Term Equity Fund
Positive Aspects
  1. BNP Paribas Long Term Equity Fund has a higher one-year rolling return (4.68%) compared to the category average (1.01%). The fund has generated 3.67% more return compared to the category average.
  2. One month rolling return  (3.89%) of the fund is more than the category average (3.81%). The fund has generated a 0.08% extra return in the one-month rolling period compared to the category average.
  3. One year rolling return rank of the fund is 4 out of 37 funds in the category. A high one-year rolling return ranking of the fund shows the superior performance of the fund.
  4. The maximum drawdown of the fund is -23.52%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  5. One year historical VaR (p95%) of the fund is (-20.25%).  The category average one-year historical VaR is -24.8%. The fund has lower VaR compared to the category average VaR that shows a lower risk of the fund.
  6. One year standard deviation of the fund is (19.37%) that is less than the category average one-year standard deviation of 22.34%.
  7. One year semi deviation of the fund 15.1% is less compared to the category average one-year semi deviation of 17.26%. This shows a lower risk of the fund compared to the category average risk.
  8. Sharpe ratio (4.89)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  9. Calmar ratio 29.19% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  10. The sterling ratio of  20.48% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  11. Burke ratio (132.63)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  12. The M2 of the fund is 7.9% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  13. The Sortino ratio of the fund is 5.63% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  14. The Treynor ratio of the fund is 1.14% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
     
Negative Aspect
  1. The fund has generated lower one quarter-rolling return (7.31%) compared to the category average (7.88%). The fund has generated -0.57% less return compared to the category average.
Conclusion

BNP Paribas Long Term Equity Fund performance has 14 positive aspects and 1 negative aspect. The performance score of the fund is 95.95. The fund is ranked 2 out of 37 funds in ELSS Fund category based on performance score. The performance score of the fund puts it at the top 15% of the funds in the category.

 

Invesco India Tax Plan
Positive Aspects
  1. Invesco India Tax Plan has a higher one-year rolling return (3.59%) compared to the category average (1.01%). The fund has generated 2.58% more return compared to the category average.
  2. One month rolling return  (3.9%) of the fund is more than the category average (3.81%). The fund has generated a 0.09% extra return in the one-month rolling period compared to the category average.
  3. One year rolling return rank of the fund is 7 out of 37 funds in the category. A high one-year rolling return ranking of the fund shows the superior performance of the fund.
  4. The maximum drawdown of the fund is -25.48%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  5. One year historical VaR (p95%) of the fund is (-24.27%).  The category average one-year historical VaR is -24.8%. The fund has lower VaR compared to the category average VaR that shows a lower risk of the fund.
  6. One year standard deviation of the fund is (22.02%) that is less than the category average one-year standard deviation of 22.34%.
  7. One year semi deviation of the fund 17.22% is less compared to the category average one-year semi deviation of 17.26%. This shows a lower risk of the fund compared to the category average risk.
  8. Sharpe ratio (12.6)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  9. Calmar ratio 34.52% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  10. The sterling ratio of  24.79% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  11. Burke ratio (160.45)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  12. The M2 of the fund is 8.93% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  13. The Sortino ratio of the fund is 9.17% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  14. The Treynor ratio of the fund is 2.87% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
     
Negative Aspects
  1. The fund has generated lower one quarter-rolling return (7.87%) compared to the category average (7.88%). The fund has generated -0.01% less return compared to the category average.
Conclusion

Invesco India Tax Plan performance has 14 positive aspects and 1 negative aspect. The performance score of the fund is 92.38. The fund is ranked 3 out of 37 funds in ELSS Fund category based on performance score. The performance score of the fund puts it at the top 15% of the funds in the category.

Taurus Tax Shield
Positive Aspects
  1. Taurus Tax Shield has a higher one-year rolling return (2.48%) compared to the category average (1.01%). The fund has generated 1.47% more return compared to the category average.
  2. The maximum drawdown of the fund is -26.77%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  3. One year historical VaR (p95%) of the fund is (-23.96%).  The category average one-year historical VaR is -24.8%. The fund has lower VaR compared to the category average VaR that shows a lower risk of the fund.
  4. One year standard deviation of the fund is (20.58%) that is less than the category average one-year standard deviation of 22.34%.
  5. One year semi deviation of the fund 16.21% is less compared to the category average one-year semi deviation of 17.26%. This shows a lower risk of the fund compared to the category average risk.
  6. Sharpe ratio (5.05)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  7. Calmar ratio 26.01% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  8. The sterling ratio of  18.94% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  9. Burke ratio (123.86)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  10. The M2 of the fund is 7.53% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  11. The Sortino ratio of the fund is 5.92% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  12. The Treynor ratio of the fund is 1.15% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
Negative Aspects
  1. The fund has generated lower one quarter-rolling return (7.74%) compared to the category average (7.88%). The fund has generated -0.14% less return compared to the category average.
  2. One month rolling return  (3.64%) of the fund is less than the category average (3.81%). The fund has generated -0.18% less return in the one-month rolling period compared to the category average.
Conclusion

Taurus Tax Shield performance has 12 positive aspects and 2 negative aspects. The performance score of the fund is 91.3. The fund is ranked 4 out of 37 funds in ELSS Fund category based on performance score. The performance score of the fund puts it at the top 15% of the funds in the category.

UTI Long Term Equity Fund (Tax Saving)
Positive Aspects
  1. UTI Long Term Equity Fund (Tax Saving) has a higher one-year rolling return (2.79%) compared to the category average (1.01%). The fund has generated 1.78% more return compared to the category average.
  2. The fund has generated higher one-quarter rolling return (9.17%) compared to the category average (7.88%). The fund has generated a 1.29% extra return compared to the category average one-quarter rolling return.
  3. One month rolling return  (4.21%) of the fund is more than the category average (3.81%). The fund has generated a 0.39% extra return in the one-month rolling period compared to the category average.
  4. One month, one quarter and one-year rolling return, all three are more than the category average rolling return.
  5. The maximum drawdown of the fund is -27.47%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  6. One year historical VaR (p95%) of the fund is (-23.84%).  The category average one-year historical VaR is -24.8%. The fund has lower VaR compared to the category average VaR that shows a lower risk of the fund.
  7. One year standard deviation of the fund is (22.33%) that is less than the category average one-year standard deviation of 22.34%.
  8. Sharpe ratio (6.7)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  9. Calmar ratio 27.11% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  10. The sterling ratio of  19.88% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  11. Burke ratio (126.01)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  12. The M2 of the fund is 7.47% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  13. The Sortino ratio of the fund is 7.0% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  14. The Treynor ratio of the fund is 1.53% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
Negative Aspects
  1. One year semi deviation of the fund (17.34%) is more compared to the category average one-year semi deviation of 17.26%. This shows a higher risk of the fund compared to the category average risk.
Conclusion

UTI Long Term Equity Fund (Tax Saving) performance has 14 positive aspects and 1 negative aspect. The performance score of the fund is 90.14. The fund is ranked 5 out of 37 funds in ELSS Fund category based on performance score. The performance score of the fund puts it at the top 15% of the funds in the category.

AXIS LONG TERM EQUITY FUND
Positive Aspects
  1. AXIS LONG TERM EQUITY FUND has a higher one-year rolling return (3.77%) compared to the category average (1.01%). The fund has generated 2.76% more return compared to the category average.
  2. One year rolling return rank of the fund is 6 out of 37 funds in the category. A high one-year rolling return ranking of the fund shows the superior performance of the fund.
  3. The maximum drawdown of the fund is -23.29%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  4. One year historical VaR (p95%) of the fund is (-22.57%).  The category average one-year historical VaR is -24.8%. The fund has lower VaR compared to the category average VaR that shows a lower risk of the fund.
  5. One year standard deviation of the fund is (21.15%) that is less than the category average one-year standard deviation of 22.34%.
  6. One year semi deviation of the fund 16.39% is less compared to the category average one-year semi deviation of 17.26%. This shows a lower risk of the fund compared to the category average risk.
  7. Sharpe ratio (29.41)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  8. Calmar ratio 53.34% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  9. The sterling ratio of  37.32% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  10. Burke ratio (244.46)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  11. Jensen's alpha of the fund is 3.87% whereas the category average Jensen's alpha is -3.23%. Jensen's alpha of the fund is more than the category average and zero that shows the superior performance of the fund.
  12. The M2 of the fund is 13.13% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  13. The Sortino ratio of the fund is 15.67% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  14. The Treynor ratio of the fund is 6.94% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
Negative Aspects
  1. The fund has generated lower one quarter-rolling return (7.14%) compared to the category average (7.88%). The fund has generated -0.74% less return compared to the category average.
  2. One month rolling return  (3.45%) of the fund is less than the category average (3.81%). The fund has generated -0.36% less return in the one-month rolling period compared to the category average.

 

Conclusion

AXIS LONG TERM EQUITY FUND performance has 14 positive aspects and 2 negative aspects. The performance score of the fund is 90.08. The fund is ranked 6 out of 37 funds in ELSS Fund category based on performance score.

Canara Robeco Equity Tax saver Fund
Positive Aspects
  1. Canara Robeco Equity Tax saver Fund has a higher one-year rolling return (9.82%) compared to the category average (1.01%). The fund has generated 8.81% more return compared to the category average.
  2. The fund has generated higher one-quarter rolling return (10.48%) compared to the category average (7.88%). The fund has generated a 2.6% extra return compared to the category average one-quarter rolling return.
  3. One month rolling return  (4.48%) of the fund is more than the category average (3.81%). The fund has generated a 0.67% extra return in the one-month rolling period compared to the category average.
  4. One year rolling return rank of the fund is 1 out of 37 funds in the category. A high one-year rolling return ranking of the fund shows the superior performance of the fund.
  5. One month, one quarter and one-year rolling return, all three are more than the category average rolling return.
  6. The maximum drawdown of the fund is -22.07%. The maximum drawdown of the fund is less compared to the category average drawdown of -29.58%. This shows the low drawdown risk of the fund compared to the category average.
  7. One year standard deviation of the fund is (21.06%) that is less than the category average one-year standard deviation of 22.34%.
  8. One year semi deviation of the fund 16.58% is less compared to the category average one-year semi deviation of 17.26%. This shows a lower risk of the fund compared to the category average risk.
  9. Sharpe ratio (32.77)% of the fund is more than the average Sharpe ratio of the category (-1.93%). A higher Sharpe ratio compared to the category average shows better risk (standard deviation) adjusted performance of the fund.
  10. Calmar ratio 59.52% of the fund is more than the average Calmar ratio of the category (19.87%). A higher Calmar ratio compared to the category average shows the fund has better maximum drawdown risk-adjusted performance than the category average.
  11. The sterling ratio of  40.96% of the fund is more than the average Sterling ratio of the category (14.47%). A higher Sterling ratio compared to the category average shows the fund has better average drawdown risk-adjusted performance than the category average.
  12. Burke ratio (274.08)% of the fund is more than the average Burke ratio of the category (90.86%). A higher Burke ratio compared to the category average shows the fund has better drawdown risk-adjusted performance than the category average.
  13. Jensen's alpha of the fund is 4.05% whereas the category average Jensen's alpha is -3.23%. Jensen's alpha of the fund is more than the category average and zero that shows the superior performance of the fund.
  14. The M2 of the fund is 13.81% whereas the category average M2 is 5.56%. M2 of the fund is more than the category average that shows a better risk-adjusted return of the fund.
  15. The Sortino ratio of the fund is 16.73% whereas category the average Sortino ratio is 3.73%. Sortino ratio of the fund is more than the category average that shows a better risk-adjusted performance of the fund.
  16. The Treynor ratio of the fund is 7.61% whereas category average Treynor ratio is -0.37%. Treynor ratio of the fund is more than the category average that shows a better risk-reward performance of the fund.
Negative Aspects:
  1. One year historical VaR(p95%) of the fund (-26.85%) is more compared to the category average one-year historical VaR-24.8%. This shows a higher risk of the fund compared to the category average risk.
Conclusion:

Canara Robeco Equity Tax saver Fund performance has 16 positive aspects and 1 negative aspect. The performance score of the fund is 89.63. The fund is ranked 7 out of 37 funds in ELSS Fund category based on performance score.

 

 


Once upon a time per capita GDP of India was higher than China. Now GDP per capita of India is one-fourth of China's GDP per capita

Indian taxation philosophy is primarily driven by the assurance and ease of tax collection. Collecting taxes from certain items (beasts of burden) is very easy for tax collectors and these items assure full tax compliance. 

The season of tax-saving has started, those who planned in advance are already investing in tax saving mutual funds. For those who are still waiting and have not identified funds, this article is for them.