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2017-18 Report Card: Performance of Scripbox Recommended Tax Saving (ELSS) Mutual Fund Portfolio

After a strong rally in FY17, the Indian Equity Market moderated. The Nifty 50 was up 10.25% in FY18. In comparison, the Scripbox ELSS portfolio was up by 12.81% resulting in an outperformance of 2.56% over Nifty 50.

For our regular SIP (Systematic Investment Plan) investors, a monthly SIP in Scripbox recommended portfolio would have returned 4.09% this year against 2.53% for a SIP in the Nifty 50. Also, the Scripbox Index lagged some of the larger mutual funds, as some of the mid and small cap oriented funds did better than the large-cap oriented funds during the financial year.

Overall, we believe that the equities continue to be the best option among investable assets and we are quite confident entering 2018-19.

1. The core idea of Scripbox :

The objective of the Scripbox portfolio of ELSS equity funds is to select a portfolio of 2 Tax Planning funds that have a consistent track record of performing better than the Nifty 50, and therefore expected to do better than the Nifty 50.

We had the following 2 funds in the financial year 2018 portfolio. This Report card is based on the performance of these funds from April 1, 2017 till Mar 28, 2018.

  • AXIS Long Term Equity Fund (G)
  • DSP BR Tax Saver Fund (G)

The analysis of the absolute performance of the Scripbox ELSS equity portfolio is a combination of the performance of the Nifty 50, and the performance of the portfolio relative to the Nifty 50.

2. Nifty Performance :

  • In 2017-18, the Nifty was up 10.25%
  • Over a decade, the Nifty has returned a CAGR of 7.88%.
  • We continue to believe that the case of Indian equities remains strong and equities as an asset class will continue to outperform fixed income over the long run.

These are returns based on a one-time investment. For returns for a SIP investor, kindly refer section 6 below.

3. Nifty 50 Relative to Other Benchmarks

In FY 2018, most benchmarks including the mid cap and small cap indices provided decent returns. There was some relative outperformance of the small caps over the benchmark large cap index.

4. Scripbox Portfolio of ELSS Equity Funds

Axis Long Term Equity Fund(G) outperformed the Nifty 50 by 6.54%; DSP BR Tax Saver Fund(G) underperformed the Nifty 50 by 1.40%.

5. Scripbox Portfolio compared to other funds:

The top 10 funds by assets, delivered an average return of 10.66% in FY 18 and the Scripbox portfolio performed better at 12.81%.

6. Returns for SIP investors

Assuming a SIP on the 01st of each month, the XIRR returns for a SIP investor was 4.09% in the Scripbox portfolio of ELSS funds, compared with 2.53% in the Nifty 50.

SIP returns in the Scripbox ELSS equity portfolio have been better than the Nifty 50 over all holding periods.

Currently, the Scripbox report card considers Nifty 50 as its benchmark for the purpose of comparison. However, SEBI’s circular dated Jan 04 2018 requires all the mutual funds to benchmark their performance against Total Returns Index (TRI) instead of Price Return Index (PRI). In line with the same, Scripbox Report Card will consider Nifty TRI as a benchmark for comparison from next year.

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