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An Average Performer

Though it does not pack the punch of some of the superstars in the tax-planning funds category, its long-term consistent performance makes it a good enough fund.

This fund gets the job done. Launched way back in March 1996 along with six others as a close-end tax-saving fund, Tata Tax Savings was converted to an open end scheme in April 99.

The fund has been a middle of the road performer. In 1999, it delivered its best performance vis-à-vis peers when the fund earned the top rank. It raced to deliver a massive 331.52 per cent return on a tech heavy portfolio. However, the joyride could not last for long. Having tasted the success with tech stocks, it further increased exposure to them in anticipation that the rally would continue in 2000 as well. However, the tech bubble busted and the fund had a free fall. In 2000, it skidded 50.82 per cent and was the worst fund in the category. Since then, like many other funds, it has adopted a cautious approach to the sector. In the next five years, the fund has not delivered any surprising returns. However, stability has returned. Last year, the fund added 46.61 per cent to beat the Sensex.

The fund suffered on account of a tech-heavy concentrated portfolio in 2000. However now, the portfolio looks much more diversified. And as the equity markets rally has moved in unchartered territory, the diversification has further improved-today, around 40 stocks form the portfolio. Starting with a large-caps dominated portfolio, the fund seems to have developed keen interest in mid- and small-cap stocks--they form the core of the portfolio now.