In the last couple of years, there has been a slight change in the investment and savings sector of the financial industry. This is due to the enlightenment of the masses when it comes to all the plans, funds and various other ways in which one can save for their future in a safe, secure and easy manner.

Of the many options that exist in the market, one particular saving fun that has caught the eye of many is the Reliance Tax Saver Fund. This plan is also referred to as ELSS (Equity Linked Saving Scheme) at times.

But before we dive into the plan headfirst and dissect it within an inch of its life in deciding whether or not it’s worth it, let’s understand the fund a bit first –

What is it?

The  Reliance Tax Saver which was first introduced as far back as in 2005, is an open-ended equity fund that is suitable for all those who are looking to make some savings out of their tax payments at the end of the financial quarter(s).

What are the benefits?

1. It benefits a lot of people as the growth from which they benefit is in equity as well as the tax payments.

2. This multi-purpose plan is suitable for all. They have kept the people and their needs in mind and so have ensured that their demographic includes everyone – from salaried employees to business associates to even senior citizens, there are benefits for everyone.

3. The long-standing success of this fund goes to show that this is a safe investment opportunity that can be taken advantage of, by one and all. Since there is a great deal of transparency ensured by the company, investors can easily look into this as a serious option.

4. Their approach to inviting in more investors for this plan is very simple and has not become complicated due to any unnecessary procedures.

5. The easiest, not to mention the most consistent method, called an SIP (Systematic Investment Plan) is provided here with the reliance tax saver. The added advantage here is that this offers a timely payment (which is these days even easier since there are options to pay the SIP amount through the internet banking or the bank application’s that are now available on almost all smartphone devices, regardless of the phone Operating System).

6. In addition to this, the SIP can be started for a very small amount (reportedly going all the way down to even Rs. 500) and can be stopped almost immediately if need be.

The analysis

The Reliance Tax Saver has the best track record since its inception, barring the last year. However, the performance given by this fund last year can almost be negated since the performance of such plans are usually observed over a course of three years.

The Reliance Tax Saver can be analysed under three broad terms: their performance in the market with comparison and contrast to their competition in the market, the risks involved and their portfolio construction.

  • Performance in market

Not taking stock of the last year performance wise, in terms of returns this tax saver has zoomed ahead and maintained that position and pace, leaving its competition trailing behind in the dust. The only notable exception in the market becomes the equity fund/plan that is provided by Axis Bank (Axis Long Term Equity Fund).

  • Risks involved

In terms of the risk-taking that is involved, the risks that have to be taken will be considerably higher, given the fact that this particular fund has its target audience in the small and the midcap segments.

But whatever doubts it might create with respect to the risks that have to be taken, it gives that peace of mind right back when dealing with the returns involved. This can be said as (as previously mentioned), this tax saver has consistently performed exceedingly well in the past 5 years or so.

  • Portfolio construction

The Reliance Tax Saver has curated their portfolio very carefully. They have collaborated with and invested in a small number of companies(**where their top 10 stocks account for only 40%) but have created a very rich diversity within that.

In addition to this, they have made sure to invest in primarily the midcap and the small segments of the market, with a change in strategy taking place only in the last year. This move to change their field and start dealing with the large segments, however, is a carefully calculated and a logical move as the large segments are now ready to give back more as the market recuperates.

From all angles, this plan simply generates confidence in the person who would like to invest their time and money in this so it is safe to go ahead and say that yes, the Reliance Tax Saver Fund is very good.