ABSL Tax Relief 96 Fund - Is it Getting Too Old For Tax
ABSL Tax Relief 96 Fund - Is it Getting Too Old For Tax Savings?
Aditya Birla Sun Life Tax Relief 96 Fund, One of the oldest and most prominent tax saving schemes in India has been losing its shape for the last few months. It used to be a consistent performer and provided better gains than most of the mutual funds in India. A large number of investors have utilised the opportunity of efficient tax saving along with long term wealth creation from ABSL Tax Relief 96 Fund. The fund has been struggling for the last one year and the returns have been dropping below most of the younger peers. Investors are unsatisfied from the performance of the scheme for the last 1 year and are questioning that whether to continue the SIPs or switch. Let us find out in detail what has forced the tax-focused investors to question the abilities of the fund that is considered as the best in the ELSS category for a long time. 

ABSL Tax Relief 96 Fund - Why is it Highly Applauded?

Aditya Birla Sun Life Tax Relief 96 Fund has been the best ELSS scheme for a long time. Since inception in 1996, it has consistently taken the advantage of every market condition to maintain a thriving 25% trailing returns since inception. The fund has always been a terrific performer and has been a top choice for millions of investors for tax saving purpose. The fund is largely chosen for tax benefits and is a prominent scheme in the ELSS category. It is known and chosen for its consistency and high returns but in the last 1 year, the fund has been struggling to keep up with its reputation.

The Sleeping Giant

The returns for the long term still stands among the best in the category but it has been slightly losing its reputation in the last few months. The reason lies with the investment strategy and the market conditions which have been in a conflicting situation for a while. The fund manager Mr Ajay Garg generally maintains a higher allocation in the best-performing stocks of mid and small-cap companies. Since 2006, when Mr Garg grabbed the steering wheel of the scheme, the portfolio has been highly inclined towards mid and small-cap stocks. This, however, didn’t have a drastic impact under normal conditions and impressive returns were garnered in the long term with the same strategy. If you are familiar with the equity trends in the market and mutual fund industry, you might be familiar with the fact that mid-cap stocks have been unable to perform well in the last 1 year. For the same reason, Aditya Birla Sun Life Tax Relief 96 Fund has been unable to perform well in the recent trends. 

This does not mean that investors should exit the scheme or switch to a different ELSS fund for tax savings. When the market condition gets along with the stream of Aditya Birla Sun Life Tax Relief 96 Fund, this sleeping giant can provide massive returns and can overshadow the underperformance of the last 1 year. With the same strategy, it has provided an outstanding return in the long term. 

Is There a Better Alternative?

Aditya Birla Sun Life Tax Relief 96 Fund has been the number one choice for tax saving in India, but a large number of new entrants have arrived in the market giving tough competition to the flagship scheme of ABSL Mutual Fund. Axis Long Term Equity Fund, ICICI Prudential Tax Saver Fund, Reliance Tax Saver Fund, etc are the top competitors. However, each scheme has a different portfolio, history, investment style and management team. Hence, investors must be smart enough to choose the best scheme for oneself. If the objective is of long term, then Aditya Birla Sun Life Tax Relief 96 Fund can be an optimum choice for capital appreciation and tax deduction. 

Aditya Birla Sun Life Tax Relief 96 Fund might be an old scheme but in mutual funds, the experience is a key to success. It has survived the worst market conditions and is still one of the best choices for tax saving investments. In the long term when the market gets in a better condition, this fund can provide multi-bagger returns to the investors.
ABSL Tax Relief 96 Fund - Is it Getting Too Old For Tax
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ABSL Tax Relief 96 Fund - Is it Getting Too Old For Tax

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