As the financial year 2022-23 draws to a close, it is better to have your tax saving plan in place if you have not already done so.

Equity-Linked Saving Scheme (ELSS), also known as Tax Saving Mutual Fund, is one of the most worthy avenues for tax-saving and wealth creation. These funds have the flexibility to invest across market capitalisation and sectors. Accordingly, most ELSS hold a diversified portfolio and are usually market cap and sector agnostic. ELSS may follow the growth style or value style of investing or a combination of both.

[Read: 3 Best ELSS to Invest in 2023 – Top Performing Tax Saving Mutual Funds in India]

Quant Tax Plan is an actively managed tax saving mutual fund that has gained traction by registering stellar performance in the last couple of years to reward investors with extraordinary risk-adjusted returns.

Graph 1: Growth of Rs 10,000 if invested in Quant Tax Plan 5 years ago

Graph 1

Past performance is not an indicator of future returns
Data as on December 13, 2022
(Source: ACE MF)  

Quant Tax Plan, erstwhile Escorts Tax Plan, was launched in March 2000 by Escorts Mutual Fund. The AMC was later acquired by the Quant Group in 2018, and the scheme was renamed as Quant Tax Plan. Notably, Quant Tax Plan witnessed significant underperformance between 2017-2019. Nonetheless, the fund registered a turnaround phase in recent years and handsomely rewarded its investors. Quant Tax Plan follows an active investment approach whereby it constantly hunts for attractive opportunities, which has helped it to generate remarkable alpha in recent years and handsomely rewarded its investors. Consequently, its AUM has grown from just Rs 23 crore as of November 2020 to Rs 2,327 crore as of November 2022. The fund’s small corpus gives it the advantage of easy liquidation and the ability to quickly shift allocation in line with dynamic market conditions. In the last five years, Quant Tax Plan has registered growth at a CAGR of 24.9%, compared to a growth of 13.1% in its benchmark Nifty 500 – TRI. An investment of Rs 10,000 in Quant Tax Plan five years back would have now tripled to Rs 30,427.

Table: Quant Tax Plan’s performance vis-á-vis category peers

Scheme Name Corpus (Cr.) 1 Year 2 Year 3 Year 5 Year 7 Year Std Dev Sharpe
Quant Tax Plan 2,327 15.03 42.47 42.91 24.91 24.89 26.37 0.37
Parag Parikh Tax Saver Fund 901 8.74 24.36 25.68 18.78 0.31
IDFC Tax Advt(ELSS) Fund 4,091 9.31 29.41 25.68 14.36 17.43 25.76 0.25
Bank of India Tax Advantage Fund 696 3.74 23.41 25.16 15.18 17.95 21.26 0.27
Canara Rob Equity Tax Saver Fund 4,583 4.38 21.88 22.76 17.11 16.66 21.32 0.25
PGIM India ELSS Tax Saver Fund 454 10.22 24.96 22.02 14.63 15.84 22.48 0.22
Mirae Asset Tax Saver Fund 14,255 3.96 21.36 21.19 16.22 23.19 0.22
Union Long Term Equity Fund 594 5.45 22.26 20.96 14.18 13.77 21.80 0.22
SBI Long Term Equity Fund 12,092 10.34 23.19 20.84 12.10 13.37 22.61 0.21
Mahindra Manulife ELSS Kar Bachat Yojana 534 8.10 25.43 20.79 12.19 22.07 0.22
NIFTY 500 – TRI 6.88 20.62 18.86 13.10 15.15 23.18 0.19

Returns are point to point and in %, calculated using the Direct Plan-Growth option. Those depicted over 1-Yr are compounded annualised.
Data as on December 13, 2022
(Source: ACE MF)
*Please note, this table only represents the best-performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully. Past performance is not an indicator of future returns. The percentage returns shown are only for indicative purposes.

Quant Tax Plan has recorded extraordinary performance in the last couple of years. In the last 2-year and 3-year period, Quant Tax Plan has generated a respective lead of 21.9% and 24.1% CAGR over the benchmark Nifty 500 – TRI, which is unmatched by any of the schemes in the ELSS category. With the recent superior performance, Quant Tax Plan tops the returns chart by a wide margin across time frames.

Following an active investment strategy, the volatility registered by the fund is higher than the benchmark and most of its peers. Nonetheless, the remarkable returns generated by the fund have helped it score high on risk-reward parameters. The Sharpe ratio of the fund, as denoted by its risk-adjusted returns, is currently the highest in the ELSS category.

Investment strategy of Quant Tax Plan

Categorised under ELSS, Quant Tax Plan has the mandate to invest at least 80% of its assets in equity and equity-related instruments across market segments. Accordingly, it aims to hold a well-diversified portfolio that is market cap and sector agnostic, and remains fully invested in equities.

Quant Tax Plan selects stocks by analysing them on its proprietary VLRT framework, viz. Valuations, Liquidity, Risk, and Timing. Here are the key features of the framework:

Valuation Analytics: Knowing the difference between price and value

Liquidity Analytics: Understanding the flow of money across asset classes

Risk Appetite Analytics: Perceiving what drives market participants to certain actions and reactions

Time: Being aware of the cycles that govern how the other three dimensions interact

This framework enables the scheme to understand the various investment trends, thereby allowing it to select high-growth potential stocks. Quant Tax Plan follows an aggressive investment approach wherein it constantly looks for opportunities to generate high alpha. In other words, the fund holds many of its stocks with a short-term view, and as a result, the fund has recorded a high portfolio turnover of around 150-250% in the last one year.

Graph 2: Top portfolio holdings in Quant Tax Plan

Graph 2Graph 2

Holding in (%) as of November 30, 2022
(Source: ACE MF)  

Quant Tax Plan usually holds 45-50 stocks in its portfolio. As of November 30, 2022, Quant Tax Plan held 50 stocks in the portfolio consisting mainly of large-cap stocks. It also held significant exposure of around 30-40% in mid-cap and small-cap stocks. The top 10 stocks accounted for 57.8% of its assets and included names like Ambuja Cements, ITC, SBI, Adani Ports and SEZ, and Reliance Industries. Unlike its peers, Quant Tax Plan has avoided adding several popular index heavyweights in its top holdings, which makes its portfolio stand out.

In the last one year, Quant Tax Plan benefitted the most from its holdings in ITC, SBI, and Adani Ports and SEZ. It also gained from VRL Logistics, IRB Infrastructure Developers, Linde India, and Stylam Industries, while it booked profit in Grasim Industries, Ashok Leyland, Dr Reddy’s Laboratories, L&T, Coal India, Container Corporation of India, ICICI Bank, and Adani Enterprises, among others.

In terms of sectors, Quant Tax Plan has higher exposure to Banking & Finance and Consumption that collectively form 39.4% of its assets. It also holds significant exposure to Transportation, Cement, and Petroleum with allocation in the range of 7-10%, along with diversification to Media, Power, Infotech, Hotels, Pharma, Chemicals, Telecom, and Metals, among others.


Quant Tax Plan has recorded stellar performance in recent years, while its returns in the past have been satisfactory. The fund stood strong during the 2020 market crash, wherein it outpaced the benchmark and many of its peers. Moreover, the fund topped the category returns in the ensuing bull phase, thereby generating significant alpha for its investors. Quant Tax Plan is quick in its approach to shift allocation between market caps and sectors depending on the market conditions.

Though the volatility registered by Quant Tax Plan is on the higher side, it has generated a higher premium for the level of risk taken. The active investment strategy of identifying multi-bagger stocks has resulted in superior returns for investors in Quant Tax Plan.

The aggressive investment strategy along with significant exposure to stocks in the lower market cap makes Quant Tax Plan suitable only for investors with a very high risk appetite and an investment horizon of at least 5 years.

This article first appeared on PersonalFN here

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