Zurich India Tax Saver (ZITS) (erstwhile Centurion Tax Saver '96) seeks capital appreciation. Investment in the fund entails a tax rebate under section 88 but for a maximum investment of Rs. 10,000 in a year and carries a three-year lock-in period.
The fund emphasizes on companies with quality management, sustainable business and market leadership. Besides, the lock-in period catalyses disciplined and long-term perspective in investing. The fund claims that its selectivity limits the portfolio's downside risk. The fund has given a handsome total return of 36 per cent since its launch in March 1996 with great consistency. This performance has been achieved by following a buy and hold strategy.
The fund follows a bottom-up approach in picking stocks and the portfolio is often overweight in few sectors in line with rapidly changing market flavors. Year 1999 was the fund's best year, in which it gained a handsome 229 per cent, riding the technology boom. By December 1999, the fund was almost 39 per cent in technology. But, the fund drastically reduced its tech weightage to 12 per cent in March 2000. Through the tech meltdown in 2000, ZITS was among the few equity funds to be in black with a modest gain of 5.74 per cent.
In the tough year for equities through 2001, ZITS fell by 4.51 per cent. But it is a marginal fall compared to almost 20 per cent average decline of the equity tax-saving category. The fund's portfolio has been selectively adrift with rapidly changing market preferences. Today healthcare, consumer non-durable and technology stocks account for 65 per cent of the portfolio. And the fund has been a beneficiary of its top sector bets in recent times with the run up in domestic health care stocks.
Overall the fund has been very rewarding and its key attraction is its ability to deliver these returns with high stability. Zurich India Tax Saver is among the most attractive tax saving fund option for investors seeking long-term growth with tax efficiency.