The Money Today-Plexus Management new fund evaluation examines the DBS Chola Tax Advantage Series I from the bouquet of DBS Chola Mutual Fund.
FUND FACTS
Offer open: Till March 19
Scheme type: 10-year, closed-ended tax planning equity
Minimum investment: Rs 500; unit price: Rs 10
Loads: Entry load: 2.25%; Exit load: Nil
Options: Cumulative & dividend payout
Investor grievances: B. John Vijayan. Tel: 022-66574007; Fax: 022-66574003
FUND STATS
Objective: To provide long-term capital growth through a diversified portfolio of equity and equity-related securities and also enable investors to get income-tax rebate.
Benchmark: BSE 200
Fund manager: Anant Deep Katare
Asset allocation:
80-100% | Equity & equity-related securities
0-20% | Debt & cash
Comparable existing schemes:
SBI Tax Advantage Fund-Series I
NAV* (Rs): 6.01
3-month return(%): -28.96
6-month return(%): -32.47
Tata Tax Advantage Fund
NAV* (Rs): 7.92
3-month return(%): -22.67
6-month return(%): -27.04
*NAV as on December 26; Source: NAVIndia
FUND PROGNOSIS
Idea distiller: The fund, with its focus on long tenure, plans to profit from value investing over multiple investment cycles.
Fund house report: DBS Chola AMC manages assets worth Rs 1,121 crore across 27 schemes (as on November 30, 2008).
Returns Profile: 2/5
Risk Profile: 4/5
Fund manager's report: This is the first fund that is being managed by Anant Deep Katare.
Scheme DNA: Four fundamentals of the fund scheme
Unique Idea: Low
Returns Possibility: Medium
Risk: Medium
Operability / Complexity: Medium
INVESTOR TAKEAWAYS
Who should apply: Investors who are looking for a tax plan but are willing to take high risk. This fund house has generated low returns at the expense of high risks across its equity schemes and even its existing ELSS has performed poorly.
Comments: Historical data proves that closed-ended funds lag behind open-ended ones on performance, so it's not clear why this fund has been introduced. Also, despite a new management and CEO, the expectations are low as it's the fund manager's first assignment.
