Franklin India TaxShield is the one of tax saving mutual funds you might have shortlisted. This is a well known equity Linked saving scheme. The Franklin India Taxshield is also featured in the top ELSS of 2016 and 2017.
In this post I will analyze the performance of Franklin India Taxshield fund through the upturns and downturns. I will also tell you the risk taking behaviour of this ELSS. I will also disclose the investment strategy of the fund. I will also dig out the information about the fund manager and management company. Let us start with the performance of the Franklin India Taxshield.
Performance of Franklin India TaxShield Fund
Franklin India Taxshield fund has been the top performing ELSS. In the last 10 year and 5 year period, It has been in the top 3 funds. However, in the last 3 year period it lagged behind. However, still It had given above average return.
|Last 1 year||Last 3 year||Last 5 Year||Last 10 year|
|Annualized Return (%)||9.78||21.23||18.25||13.77|
|Plus or Minus to Category Return (%)||-0.40%||1.68||1.25||3.27|
|As on 13 Dec 2016 – Valueresearchonline|
The return of last some years does not give you the true picture. Because an extraordinary performance in a particular year can increase the overall return of all these years. A person who had invested in particular fund 10 years back would get the annual return of 13%, whereas a person who had invested 3 years back would get 21% return in the same Franklin India Taxshield.
That is why the consistency is more important than the overall return. To judge the consistent return of Franklin India Taxshield, We would check the return of the fund in each past years.
|Franklin India Taxshield Fund Return (%)||ELSS Category Return (%)|
The above table gives you the real picture of performance through the past 10 years. Despite being top performer during last 10 years, there has been only 4 times in 10 years when Franklin India taxshield has performed better than the category average. However you should also note that in all these years, the performance of Franklin India taxshield was very close to the category average. This consistent performance has made the Franklin India taxshield top performer in 10 years period.
Is It Very Risky?
The best thing about the Franklin India taxshield is that it is least risky fund among category ELSS. When market went down the Franklin India taxshield was less affected. In 2009 and 2011 both, Franklin India taxshield outperformed category average with big difference. It gives you some assurance that your ELSS would not go down drastically.
Besides the return, other parameters are also used to judge the risky nature of a mutual fund. The volatility, standard deviation and Beta is used to know about the risk of mutual fund. In all these parameters the Franklin India taxshield has been outstanding. Indeed, the low risk is the biggest virtue of the Franklin India taxshield. There are few ELSS which has taken low risk. It is one among them.
|Beta||Standard Deviation (3 years)||Standard Deviation (5 years)|
Comparison With Peers
There are about 55 Equity Linked Saving schemes. But I am not going to compare the Franklin India taxshield with all of them. Rather, I will compare the Franklin India taxshield only with the Top ELSS tax saving mutual funds of 2016. The top ELSS of 2016 are the following.
- Axis Long Term Equity
- Birla Sunlife Tax Plan
- DSP Blackrock Taxsaver
The franklin India Taxshield has given very good return during last 3 years but Axis Long Term equity and Birla Sun Life tax plan has performed better than this. However it is marginally higher than the DSP blackrock tax saver.
The volatility (standard deviation) of Franklin India taxshield is also far less than the Birla Sun Life and DSP Blackrock Taxsaver. Axis Long term equity fund is also more volatile than this. It means that the Franklin India taxshield is least risky ELSS.
|Franklin India Taxshield||Axis Long Term Equity||Birla Sunlife Tax Plan||DSP Blackrock Taxsaver|
|Return During Last 3 years (annualized %)||21.25||22.45||22.34||23.28|
|+/- Category (%)||2.00||3.20||3.10||4.03|
|3-Year Standard Deviation||14.13||14.28||15.73||16.11|
|3-Year Mean Return||22.75 %||24.44%||23.89 %||25.04%|
Franklin Templeton Investments is one of the world’s largest asset management groups with over US$850 billion in assets under management (AUM). The mutual fund company is famous for its value investing approach. It takes less risk and invests for the long term.
(Data Updated on 14/12/2016)