Reliance tax saver is an Equity linked savings scheme (ELSS) fund. Most ELSS funds have lock-in period of three years. Most top ELSS funds start showing impressive returns, especially in the long run starting from the third year. Five-year returns of top-ranking ELSS funds are to the tune of 18-19%. The short-term returns ranging from one month to a year are typically low and even negative.
Reliance tax saver is equity-based open-ended scheme of Reliance Mutual Fund. Reliance tax saver fund invests mainly in equity and equity related instruments. Reliance tax saver portfolio scheme has been offered with the objective of generating long-term capital appreciation.
Reliance tax saver offers both lump sum and Sip mode of investment. The minimum Sip amount is Rs 500 per month. The minimum investment in the fund should be at least Rs 500, and additional investment can be minimum Rs 500 and multiples of 500 thereon. The fund allows minimum withdrawal of Rs100 and minimum balance requirement is Rs 1. The fund does not levy any exit load.
Reliance Tax Saver (Regular) Fund Returns
The volatility of Reliance ELSS plan can be assessed from the returns yielded by the Reliance ELSS mutual fund over periodic intervals. The returns till one year are absolute returns and returns over one year are annualized returns. The table below shows the returns yielded by Reliance tax saver over the periods of time:
The table below shows the comparison of returns of Reliance tax saver against the benchmarks:
Table 1: Reliance tax saver (Regular) returns against a benchmark
Time Period |
Reliance tax saver |
Nifty |
Category Average |
YTD |
-23.77 |
-2.15 |
-10.20 |
30 days |
-2.87 |
-5.16 |
-3.16 |
90 days |
-7.57 |
-8.50 |
-8.64 |
Yearly |
-20.30 |
-0.88 |
-6.54 |
Three years |
5.81 |
10.54 |
8.94 |
Five Years |
18.12 |
12.88 |
15.75 |
Ten Years |
18.17 |
16.07 |
16.45 |
Table 2: Reliance Tax Saver (Direct) Fund Returns against the benchmark
Time Period |
Reliance tax saver |
Nifty |
Category Average |
YTD |
-23.16 |
-2.15 |
-9.41 |
30 days |
-2.81 |
-5.16 |
-3.07 |
90 days |
-7.37 |
-8.50 |
-8.40 |
Yearly |
-19.53 |
-0.88 |
-5.56 |
Three years |
6.74 |
10.54 |
10.07 |
Five Years |
19.09 |
12.88 |
16.69 |
Ten Years |
– |
16.07 |
– |
The volatility of Growth of Investment in Reliance Tax Saver
The following table shows the volatility of growth in investor’s money in the Reliance tax saving ELSS:
Table 3: Periodic Growth of Investment from Reliance Tax Saver
Time Period |
The growth of Rs 10,000 |
Growth % |
Seven days |
10381.10 |
3.81 |
30 days |
9728.33 |
-2.72 |
90 days |
9190.81 |
-8.09 |
Half Yearly |
8581.27 |
-14.19 |
Yearly |
7993.75 |
-20.06 |
Three years |
11777.36 |
17.77 |
Five Years |
23017.58 |
130.18 |
Reliance Tax Saver Volatility
When returns remain nearly the same over time, then we can say that returns are highly stable. Reliance equity scheme MF shows large variations of returns over the time periods. The category average returns also show marked variation over the same time periods. The objective of Reliance tax saver fund is long-term capital appreciation. Most equity-based funds show fluctuations in returns, especially the returns below one year fluctuate much. If we see the day to day returns of the top ELSS funds from online portal, then significant fluctuation can be observed. As can be seen from the tables, Reliance tax saver does not perform well in the short run in comparison to the above two benchmarks, but the fund shows very high returns in comparison to the benchmarks in the third and fifth year. This is in tandem with the objective of the fund which states long-term capital appreciation.
Reliance tax saver volatility measure
Rating agencies use several measures to measure volatility. The commonly used measures are mean, standard deviation, alpha, and beta. Volatility is a measure of risk. The volatility of Reliance tax saver can be measured using the tools and then compared against the volatility of the chosen benchmarks:
Table 4: Reliance tax saving (Regular) scheme volatility against the benchmark
Volatility/Risk Measure |
Fund |
Ranking within a category (29 funds) |
|||
Reliance tax saver |
Nifty |
Category Average |
|||
Mean Deviation |
9.57 |
13.11 |
11.00 |
21 |
|
Standard Deviation |
18.67 |
14.17 |
15.45 |
29 |
|
Alpha |
1.18 |
– |
0.99 |
24 |
|
Beta |
-4.49 |
– |
-1.83 |
29 |
|
Table 5: Reliance tax saving (Direct) scheme volatility against the benchmark
Volatility/Risk Measure |
Fund |
Ranking within a category (30 funds) |
|||
Reliance tax saver (Direct) |
Nifty |
Category Average |
|||
Mean Deviation |
10.45 |
13.11 |
10.71 |
25 |
|
Standard Deviation |
18.69 |
14.17 |
15.58 |
30 |
|
Alpha |
1.18 |
– |
0.98 |
30 |
|
Beta |
-3.62 |
– |
-0.25 |
28 |
|
It can be seen from the above table that Reliance tax saver is far from being a top ranker. If we take the average of its ranking from above, we find that Reliance tax saver ranking concerning volatility is around 25 out of total 29 funds in the regular category.
Portfolio of Reliance Tax Saver
We have compared Reliance tax saver equity fund for volatility with the standard benchmark of Nifty 100 TRI and also with Category average. Fund managers essentially reduce fund volatility by managing the fund portfolio. The table below shows a benchmark of portfolio features of Reliance tax saver with Nifty and Category Average.
Table 5: Reliance tax saving (regular) plan portfolio against the benchmark
Fund |
Average Market Cap (Rs Crores) |
Portfolio Proportion (%) |
||||
Giant cap |
Large cap |
Mid cap |
Small cap |
Tiny cap |
||
Reliance tax saver |
34,560.91 |
25.50 |
25.92 |
31.56 |
17.02 |
– |
Nifty |
2,83,431.47 |
74.48 |
22.29 |
3.23 |
– |
– |
Category Average |
70,973.21 |
47.88 |
18.34 |
25.26 |
8.68 |
0.53 |
Table 6: Reliance tax saver (Direct) portfolio against the benchmark
Fund |
Average Market Cap (Rs Crores) |
Portfolio Proportion (%) |
||||
Giant cap |
Large cap |
Mid cap |
Small cap |
Tiny cap |
||
Reliance tax saver (Direct |
34,560.91 |
25.50 |
25.92 |
31.56 |
17.02 |
– |
Nifty |
2,83,431.47 |
74.48 |
22.29 |
3.23 |
– |
– |
Category Average |
70,973.21 |
47.88 |
18.34 |
25.26 |
8.68 |
0.53 |
Reliance tax saver peer comparison
We have compared Reliance tax saver with the standard benchmarks for volatility and rankings. We can now make a quick comparison with top peer funds in the same category.
Returns comparison: the table below shows the returns of Reliance equity tax saving fund with top-performing peer funds
Table 7: Reliance tax benefit fund (Regular) returns comparison against peer funds
Fund |
Returns (%) |
Expense ratio |
Assets (Cr) |
Inception |
||
1 yr |
3 yr |
5 yr |
||||
Reliance tax saving equity fund |
-20.30 |
5.81 |
18.12 |
1.95 |
9630 |
Sep 2005 |
DSP tax saver fund |
-8.6 |
10.32 |
16.89 |
2.06 |
4373 |
Jan 2007 |
IDFC tax advantage fund |
-6.86 |
11.45 |
17.01 |
2.39 |
1614 |
Dec 2008 |
Invesco India tax plan |
-0.78 |
9.97 |
17.93 |
2.63 |
609 |
Dec 2006 |
L&T tax advantage fund |
-5.77 |
12.10 |
16.46 |
2.24 |
3181 |
Feb 2006 |
Table 8: Reliance tax saver (Direct) returns comparison against peer funds
Fund |
Returns (%) |
Expense ratio |
Assets (Cr) |
Inception |
||
1 yr |
3 yr |
5 yr |
||||
Reliance tax saving equity fund |
-19.53 |
6.74 |
19.09 |
1.33 |
9630 |
Jan 2013 |
Aditya Birla Sun Life Tax Relief 96-Direct Plan |
-3.33 |
12.01 |
20.14 |
1.11 |
6,628 |
Jan 2013 |
Axis long term equity-Direct plan |
1.61 |
10.40 |
21.47 |
1.24 |
16,999 |
Jan 2013 |
DSP tax saver fund-direct plan |
-7.71 |
11.40 |
17.83 |
1.29 |
4373 |
Jan 2013 |
IDFC tax advantage (ELSS) Fund-Direct plan |
-5.68 |
12.73 |
18.42 |
1.18 |
1614 |
Jan 2013 |
Fund ranking: Noted fund rating agencies provide fund ranking on a scale of 5. At present Reliance tax saving equity mutual fund has been given only one-star point and the other top performing peer funds have been given four or five-star points.
Expense ratio comparison: expense ratio is the per unit cost of managing the fund. Higher expense ratio can lower the fund returns. The expense ratio comparison of Reliance tax benefit equity plan against peer funds has been shown in table 6 above. Out of all the funds, Reliance tax saving fund has the lowest expense ratio in the regular fund category.
Assets comparison: Table 6 also shows the assets comparison of Reliance tax saving equity scheme against the three other peer funds. As per the table Reliance tax, saving equity plan has the highest assets.
Inception date: From table 6 it can be seen that the Reliance tax benefit equity scheme (regular) was the earliest to be launched than the other three peer funds.
Reliance tax saver scheme dividend payouts
Reliance has been announcing dividends on its tax saving regular and direct plans. For the regular plan, the dividend/unit ranges from 1.5-.25 Rs per unit of the fund. The company paid out three dividends in the year 2018. In March the dividend payout was .6 Rs/unit, in June it was .5312 per unit, and in September it was .3542 per unit. The most recent NAV of Reliance tax benefit equity fund is Rs 52.6399, and that is the present value of one unit of the fund. The yearly dividend payout of the Reliance tax saving ELSS fund is presently 11.1262.
The direct Reliance tax saver plan is showing a growth of Rs 55.145. The yearly dividend for the direct plan is 11. 3873.
Reliance Tax Saver FAQs
Q. What can be the reasons of Reliance tax saver volatility?
A. One reason can be a tradeoff between volatility and fund objective. It can be possible that Reliance tax saver fund is made to suffer some volatility in order to realize its objective of long-term capital appreciation.
Q. Is volatility beneficial for Reliance tax saver?
A. Industry analysts associate volatility of returns with risk. Funds with low volatility of returns are ranked high in the managed risk criteria. The industry uses several measures to analyze risk, and these include mean, standard deviation, Sharpe, Sortino, Beta, and Alpha.
The high volatility of Reliance tax saver is making it score low on risk management criteria and is considerably reducing the fund ranking.
Q. What is the ranking of Reliance tax saver concerning risk management criteria?
A. If we measure the risk of the fund with well-known tools like mean, standard deviation, alpha, and beta, then Reliance tax saver loses due to volatility. All the risk measuring tools show a high risk associated with the ELSS tax saver scheme of Reliance.
Considering the number of funds in the category as 29, Reliance tax saver ranks around 25. Reliance is losing out to other top ELSS mutual funds because of volatility.
Q. Is it beneficial to invest in Reliance tax saver?
A. While considering a fund’s benefits, an investor needs to consider not only returns but also dividend yield and investment growth. Other features like expense ratio should also not be overlooked. Reliance equity fund has announced dividends from time to time for the investors in Reliance tax saver fund, and that has enriched the overall benefits package of the fund. Yet the fund showed very good performance in 2014-15 and after that again reverted to its volatile pattern of returns.
This is the age of SIPs and investors are plucky, short-term dips below standard benchmarks can largely discourage investors. In the long run, the investor may realize some absolute gain, but comparative gains are low against the top performing peer funds in the same category. The three year returns for the fund against benchmarks and peer funds are surprisingly low. The fund only performs well under five-year returns.
Q. What is Reliance tax saver fund portfolio composition?
A. Reliance tax saver equity scheme comprises of fifty-six stocks. Top 10 stocks comprise 49.07%, top 5 stocks comprise 32.19%, top 3 stocks comprise 59.93%. The fund invests in top companies from financial, automobile, metal, engineering, construction, and energy sectors.
Q. What are the P/B ratio and P/E ratio of Reliance tax saver fund portfolio?
A. Fund portfolio ratios can be used for comparing portfolios of different peer funds. The P/B ratio of Reliance ELSS tax saver plan is 1.70, and the P/E ratio is 15.91
Q. How can Reliance tax saver improve fund performance?
A. Reliance tax saver pays out regular dividends on its plan. The dividend payouts by Reliance may pacify the existing investors of the Reliance ELSS scheme, yet new investors may vary.
Reliance tax saver can improve performance by largely drawing from its long-term capital gain creation experience and improving short-term performance. The Reliance tax saver fund portfolio needs to be managed for short-term volatility and returns as well.
You must be logged in to post a comment.