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Bharti AXA Fund Gains 92%, Beats Sensex

The fund has declared a 10% dividend for its investors

Yet another equity fund from Bharti AXA Mutual Fund, Bharti AXA Tax Advantage, has declared a dividend of 10%, or rupee 1 per unit. The record date for the dividend declaration is June 04, 2009.

The fund, launched in February 2009, has already beaten the category gain of 49.27%, by notching up a 74.30% gain for the same period.

It went and battered not just its category, it easily left the stock market indices way behind. Since March 09, 2009 when Sensex had hit its lowest point, the fund has gained 92.17% while Sensex returned 79.22% and Nifty returned 72.89%.

This is the 7th tax planning equity scheme, or ELSS, to declare dividends in the current year.

Dividends Under ELSS in 2009
Scheme Date Dividend (%)
Magnum Taxgain 29-May-09 28
Birla Sun Life Tax Plan 20-Mar-09 45
HDFC Taxsaver 6-Mar-09 50
Taurus Tax Shield 6-Mar-09 10
HDFC LT Advantage 27-Feb-09 35
Taurus Tax Shield 27-Jan-09 10

(Check out the best Tax Saving funds in the past one year)

With so many fund managers sitting on uninvested piles of cash due to their unwillingness to bet on the markets retaining their rising graph, this fund managed to go against the tide of the general fund managers mindset and thereby log gains.

The fund was able to capture the market returns more efficiently due to reduced cash holdings of 5.79% in April 2009, down from 16.95% in March 2009. The average cash holding for the funds in the category was 16.25%, which dragged down the performance of these funds. This strategy enabled the Bharti AXA fund to capture the gains that the markets had generated in May 2009 as a result of the Dr Manmohan Singh-led dispensation retaining their hold on power with a better-than-expected majority in the Parliament.

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More than that, some very pertinent calls, especially on the banking sector, helped the fund to make the conspicuous gains. Banking stocks have been among the top gainers in the recent market rally, and the fund benefited from its allocation of 16.88% to the financial sector in its portfolio in April 2009.

The fund follows a top-down approach for selection of individual stocks without any bias of market capitalisation or sectors.