4 tax saving mutual funds that are worthy bets

This fund exhibits a near perfect track record in consistently beating its benchmark index in recent years. It has beaten its index 100% of the times over three year time frames spanning the past five years. Even over five year time frames, the fund has beaten its index 99.6% of the times. It runs a fairly diversified portfolio with a strong emphasis on quality, avoiding companies with weak balance sheets or over-leveraged ones. That has resulted in restrict drawdowns, as is evident in its down capture ratios— among the lowest in its category over both three and five year periods. This allows it to outperform comfortably across cycles, despite enjoying lower upside capture relative to the index. Meanwhile, its standard deviation (19.9 and 17.35) over these time periods is also contained.

Even in the limited time span since its inception in 2015, the fund has established firm credentials under current stewardship. Three year returns rolled daily over a five year period reveal this fund has outperformed its benchmark index 100% of the times. Over five year time horizons, the fund averages a stunning 21% since its inception— the highest in this category. Comparatively, its index has averaged 12% over similar horizon. The fund is not among the best at cushioning the downside yet fares better than its index across both time periods. What gives it the edge is its superior upside capture (107.08 and 106.34) compared to peers. Many of its peers have displayed lower standard deviation but it is in line with its index at 21.95 and 18.90 respectively.

With Rs 33,785 crore in assets, this is the largest fund in the category. Though it has seen a dip in its return profile recently, it is still among the better performers. This compact fund has outperformed its index 95% of the times over three-year time frames and 85% of the times over five years. With its firm quality bias and tactical cash calls, the fund boasts a strong downside performance. It has captured just under 90% of the index declines over the past three and five years, thus capturing lower market upside than many peers. Standard deviations of 20.38 and 18.01 over both time frames are testament to the fund's lower volatility than its index.

This Rs 546 crore fund has been punching above its weight for many years now. It takes a differentiated approach compared to most peers, taking sizeable exposure to midcaps. This is a fund that has beaten its index 100% of the times in thee last seven years. Even over the the three-year period, the fund has a healthy run rate, beating its index 78% of the times in the last five years. Its downside performance is noteworthy, capturing only 75% and 87% of the index declines. This has been supplemented by a higher upside capture to deliver well-rounded performance across market phases. As a result, the fund ranks in the top quartile across both time frames. This performance has been generated without showing high volatility, as depicted by standard deviations of 20.14 and 19.11.

Source: Morningstar India | Return figures as on 31 Jan 2022