The DSP Tax Saver Scheme launched on January 18, 2007, is an open-ended ELSS scheme. The fund invests 98% in Indian stocks, of which 68.02% is parked in large-cap stocks, 11.16% in mid-cap stocks, and 9.97% is parked in small-cap stocks.
DSP Tax Saver Fund is an ELSS or equity-linked savings scheme which is eligible for tax deduction under Section 80C of the Income Tax Act. Like all tax-saving investment options under Section 80C, ELSS also comes with a mandatory lock-in time. The minimum lock-in period for tax-saving mutual fund schemes is three years. That is means you cannot sell them before the compulsory lock-in period is over. Since you are investing in SIP, you will have to wait for each SIP installment to complete the required lock-in period. It means that in the 37th month, you will redeem your first SIP installment, and the next month and so on, the second installment.
The objective of the scheme
DSP Tax Saver Fund seeks to provide long-term capital appreciation to its investors through systematic investment in equity and bond-related instruments. The fund also has the added benefit of having an ELSS, which helps investors reduce their taxable income by Rs. 1.5 lakh by investing in this fund. There is no guarantee that the fund can overcome its objections
- Low variability in return over large-cap exposure.
- It implies a strategic call to capitalize on market trends and opportunities.
- Diversified portfolio but takes a high risk in top bets
Top stock holdings for this fund are-
- HDFC Bank Limited (6.69%)
- ICICI Bank Limited (4.64%)
- Tata Steel Ltd, (4.28%)
- State bank of India (3.95%)
- L&T Limited (3.31%).
Riskometer– Investors assume that their principal will be at Moderately High risk
Expense Ratio– 2.11
Benchmark– IISL Nifty 500 TR INR
AUM– ₹ 6381.43 Crores
Fund manager- RohitSinghania
DSP Tax Saver Fund Growth is an ELSS equity fund and has generated 10.14 percent of annualized returns over three years. DSP Investment Managers Private Limited manages the fund. The name of the fund managers is RohitSinghania.
Advantages/Pros of DSP tax saver Mutual Fund:
- Age is more than ten years
- 3years returns are higher than the benchmark
- Five years’ profits are higher than the benchmark
- Ten years’ profits are higher than the benchmark
- Exit load is zero
Disadvantages/Cons of DSP tax saver Mutual Fund:
- Risk is higher compared to the benchmark
- Higher expense ratio
- 1 year returns are lower than the benchmark (but positive)
Conclusion: The primary investment objective of the plan is to try to produce medium to long-term capital appreciation from a diversified portfolio that is primarily composed of corporate equities and equity-related securities, and help investors take advantage of the overall income deduction enables, as permitted under the Income Tax Act, 1961 from time to time. The minimum SIP amount for this is ₹1000. If you want to invest outright, the minimum amount to be invested is invested ₹1000.