Poor returns from tax-saving funds | Value Research If your fund performs poorly for an extended period of time, consider replacing it with one that’s doing better
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Poor returns from tax-saving funds

If your fund performs poorly for an extended period of time, consider replacing it with one that’s doing better

Last year I invested Rs 30,000 in Reliance Tax-saver fund. It is not doing well now. Should I continue investing to save tax or choose another scheme?
-Varun Gupta

The fund has done badly this year as it lost 21.45 per cent compared to 12 per cent fall in the category. This happened because of the fund’s high exposure (84 per cent) to mid & small cap stocks.

Sensex lost five per cent this year while BSE Midcap and BSE Smallcap lost around 25 and 30 per cent respectively. This is also a reason for the fund's rating to come down to three-star from the previous four-star.

If you are not comfortable with high mid & small-cap exposure, opt for funds with a higher exposure to large cap stocks. Funds like Canara Robeco Equity Tax Saver and Franklin India Taxshield have higher exposure to large-cap stocks and have delivered returns in a much stable manner.




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