personal finance

Invesco India Tax Plan: Fund review

It is the beginning of the financial year, and one resolution to be undertaken is to assess investments and save on taxes through a systematic investment plan (SIP) in an Equity Linked Savings Scheme (ELSS).

Among the many ELSS schemes, investors can consider Invesco India Tax Plan. There are three aspects of the scheme which makes it a distinguished performer in the category.

First, it closely follows a multi-cap approach which is quite necessary in the present market conditions. A key reason being earnings’ growth is being witnessed in select sectors and companies of varied sizes. The scheme invests close to 65% in large-sized companies, 25.3% in mid-sized companies and remaining in smallsized companies.

Second, the scheme’s fund managers Amit Ganatra, and Dhimant Kothari follow a very value-conscious portfolio which has strong diversity in terms of sectors, too. The portfolio is a combination of defensives, consumption and IT, which works well in almost all market cycles. Lastly, the scheme’s performance has been extremely encouraging especially in protecting the downside when markets have been falling. This is largely due to high exposure to large-sized companies which provides consistency in its performance.

The evidence is in the numbers. The scheme has consistently beaten its benchmark index and peers by a wide margin — 5-7%. In the past fiveyear and ten-year periods, the scheme has given 17% and 20% returns, respectively, while the category average has stood at 14% and 17%, respectively.

Portfolio change (past 6 months)

New entrants Complete exits Increase in allocation
Apollo Hospitals Jamna Autoindustries VIP Industries
Axis Bank Kotak Mahindra Bank Hexaware Technologies
BPCL Mahindra & Mahindra Excide Industries
Coromandal International Petronet LNG United Breweries
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Returns (in %)

Period CAGR Return SIP CAGR Return Diversified Large cap –
1 year 9.08 8.15 1.86
3 year 15.59 11.89 14.96
5 year 17.53 12.91 15.33

Returns peer comparison (in %)

Scheme 1-year 3-year 5-year
DSP Tax Saver Fund 8.42 15.56 17.69
IDFC Tax Advantage 0.94 16.38 16.96
JM Tax Gain Fund 6.96 16.79 16.57

Source: Accord Fintech; Complied by ETIG Database

Expert Take

CFP, Roongta Securities

This scheme is large-cap oriented and a value conscious ELSS fund. This approach has helped it to contain the downside well during extreme volatility and at the same time beat its benchmark during bull phases. It has been a consistent performer since inception, more particularly beating the benchmark in the three- and five-year periods. Investors looking for ELSS with a holding period beyond five years can consider this fund.


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