MOSt Focused Long Term - Regular Plan - Growth Option: Fund to Save Tax

MOSt Focused Long Term - Regular Plan - Growth Option: Fund to Save Tax

Mar 26, 2018

Financial investments are of various types with each one of them created to provide different benefits. Earning higher rate of returns, tax benefits, long term financial stability etc are few of the benefits that are sought out while investing in any of the financial plans. Equity liked Savings Scheme (ELSS) funds are a type of mutual funds which provide a dual benefit of tax benefits and capital appreciation. These funds are qualified to be part of 80C exemptions under Income Tax act.

Investing in ELSS mutual funds not only helps in saving on the tax but also provides an opportunity to avail the benefits of investing in equity market. Investments in equity have potential to attract higher rates of returns when compared to other investments. ELSS investments have the shortest lock in period of only three years. Few of the investment plans also provide with an opportunity of earning dividends even during the lock in period. Further, any long term capital gains that are derived out of investing in ELSS are eligible for complete Tax exemption. They do carry a higher amount of risk but in most of the cases, the benefits do outweigh the potential risk.

Investing in MOSt Focused Long Term - Regular Plan - Growth Option: Fund to Save Tax

MOSt Focused Long Term – Regular Plan – Growth Option is an Equity Linked Service Scheme (ELSS) which was launched on 21-01-2015 and has been recording good return on investments over the last two years as well as providing an opportunity to avail tax benefits. The minimum initial investment into this scheme is Rs. 500 and further investments of minimum Rs. 500 can be made as top up to the initial amount invested.

This ELSS scheme has a major share of its investments into Finance and Banking sectors, up to nearly 43 %. Auto, Pharmaceuticals, petroleum, gas, transportation, consumer non durables and software being other major sectors into which this mutual fund is invested. The individual stocks into which the fund invests are diverse which helps in distributing the risk potential and mitigating the overall risk. The investment is done in major high potential stocks such as Maruti Suzuki India Ltd, HDFC Bank ltd, Housing Development Finance Corp, Indusind Bank, Bharat Petroleum, Max Financial services etc. These stocks have been performing consistently and offer a higher dividend, thereby enabling higher earnings from the mutual fund.

Comparative performance of the fund within the category

Since its inception, two years back MOSt Focused Long Term – Regular Plan – Growth has been offering higher rates of returns when compared to most of other funds in the category of ELSS.

The one year return of the fund is 26 % which is higher than both the ELSS category average of 17.97 % and the CNX-500 benchmark of 18.77. Even the three years returns from the fund are higher than the CNX-500 benchmark as well as the ELSS category performance. The three years return of 18.66 % is remarkably higher than 8.85 % and 10.25 % returns of CNX-500 and ELSS category respectively.

Source: Swaraj Wealth Research

The fund has been a consistent performer since its inception, reflected in the 20.11 % of returns which is higher than CNX 500 three year average of 14.95% and ELSS category average of 15.29%

Source: Swaraj Wealth Research

The year on year performance of MOSt Focused Long Term – Regular Plan – Growth option has also been higher than the CNX 500 bench mark as well as the ELSS Category benchmark. Especially in the year 2017, the fund delivered a high return of 43.96 % which also happens to be higher than benchmarks.

This ELSS fund is a good investment option to gain higher returns on investment as well as to avail tax benefits. The wide range of individual stocks that the fund is invested in helps to counter any unexpected movement and mitigate the risk element. Banking and Finance sectors, into which the fund is majorly invested into have traditionally been high earning sectors enabling higher returns for this fund.

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