\n\tMarket volatility: Risk Profile of Schemes<\/strong><\/p>\n\n\tInvesting in ELSS funds offers tax benefits alongside the growth potential, but understanding their risk-reward profiles is crucial before choosing.<\/p>\n\n\t
\n\t\n\t
\n\t\t\n\t\t\t\n\t\t\t\t| Risk Ratio<\/td>\n\t\t\t\t | Motilal Oswal ELSS Tax Saver Fund<\/td>\n\t\t\t\t | Bandhan ELSS Tax Saver Fund<\/td>\n\t\t\t<\/tr>\n\t\t\t |
\n\t\t\t\t| Standard Deviation (3 Year)<\/td>\n\t\t\t\t | 15.68<\/td>\n\t\t\t\t | 14.14<\/td>\n\t\t\t<\/tr>\n\t\t\t |
\n\t\t\t\t| Sharpe<\/td>\n\t\t\t\t | 0.35<\/td>\n\t\t\t\t | 0.31<\/td>\n\t\t\t<\/tr>\n\t\t\t |
\n\t\t\t\t| Sortino<\/td>\n\t\t\t\t | 0.70<\/td>\n\t\t\t\t | 0.60<\/td>\n\t\t\t<\/tr>\n\t\t<\/tbody>\n\t<\/table>\n\t<\/div>\n\t<\/center>\n\n\tData as of July 31, 2024
\n\tDo note past performance is not an indicator of future returns
\n\tThe securities quoted are for illustration only and are not recommendatory.
\n\t(Source: ACE MF, data collated by PersonalFN Research)<\/span><\/center>\n\t \n\n\tAn investment with high volatility is considered riskier than an investment with low volatility; the higher the Standard Deviation, the higher the risk. The Motilal Oswal ELSS Tax Saver Fund has a higher standard deviation of 15.68 compared to 14.14 for the Bandhan ELSS Tax Saver Fund. This suggests that Motilal Oswal's fund experiences greater fluctuations in its returns, meaning it has higher inherent volatility. Investors in the Motilal Oswal ELSS may need to be prepared for sharper ups and downs, which could either enhance or diminish returns depending on market conditions. On the other hand, the Bandhan ELSS Tax Saver Fund is relatively less volatile, indicating a more stable ride for investors who prefer a lower risk tolerance.<\/p>\n\n\t The Motilal Oswal ELSS Tax Saver Fund has a Sharpe ratio of 0.35, slightly higher than the 0.31 of the Bandhan ELSS Tax Saver Fund. This implies that, despite the higher volatility, Motilal Oswal's fund is delivering more returns for the risk it takes. In contrast, while the Bandhan ELSS fund is less volatile, its risk-adjusted return is slightly lower, which suggests that it may not compensate investors as well for the risks they are taking.<\/p>\n\n\t The Motilal Oswal ELSS Tax Saver Fund has a higher Sortino ratio of 0.70, compared to 0.60 for the Bandhan ELSS Tax Saver Fund. This indicates that Motilal Oswal's fund has been more efficient in managing downside risks, providing better protection during periods of negative returns. Bandhan ELSS, while still effective, has shown a slightly lower ability to shield its investors from downside volatility, which may be a consideration for risk-averse investors.<\/p>\n\n\t Remember, this comparison is just to give you an idea about the risk profile of both the ELSS. Consider your risk tolerance and investment goals to determine which fund aligns better with your investment strategy.<\/p>\n\t<\/li>\n\t \n\tTop Holdings of the Schemes: <\/strong><\/p>\n\n\t\n\t\n\t \n\t\t\n\t\t\t\n\t\t\t\t| Bandhan ELSS Tax Saver Fund<\/td>\n\t\t\t\t | Motilal Oswal ELSS Tax Saver Fund<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Company<\/td>\n\t\t\t\t | % Assets<\/td>\n\t\t\t\t | Company<\/td>\n\t\t\t\t | % Assets<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| HDFC Bank Ltd.<\/td>\n\t\t\t\t | 5.40<\/td>\n\t\t\t\t | Zomato Ltd.<\/td>\n\t\t\t\t | 7.51<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| ICICI Bank Ltd.<\/td>\n\t\t\t\t | 5.08<\/td>\n\t\t\t\t | Trent Ltd.<\/td>\n\t\t\t\t | 6.69<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Reliance Industries Ltd.<\/td>\n\t\t\t\t | 4.82<\/td>\n\t\t\t\t | Prestige Estates Projects Ltd.<\/td>\n\t\t\t\t | 5.00<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Axis Bank Ltd.<\/td>\n\t\t\t\t | 3.74<\/td>\n\t\t\t\t | Kalyan Jewellers India Ltd.<\/td>\n\t\t\t\t | 4.98<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Infosys Ltd.<\/td>\n\t\t\t\t | 3.64<\/td>\n\t\t\t\t | Suzlon Energy Ltd.<\/td>\n\t\t\t\t | 4.35<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Bharti Airtel Ltd.<\/td>\n\t\t\t\t | 2.49<\/td>\n\t\t\t\t | Inox Wind Ltd.<\/td>\n\t\t\t\t | 3.80<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| NTPC Ltd.<\/td>\n\t\t\t\t | 2.32<\/td>\n\t\t\t\t | Bharat Dynamics Ltd.<\/td>\n\t\t\t\t | 3.78<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| CG Power and Industrial Solutions Ltd.<\/td>\n\t\t\t\t | 2.15<\/td>\n\t\t\t\t | CG Power and Industrial Solutions Ltd.<\/td>\n\t\t\t\t | 3.60<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Jindal Steel & Power Ltd.<\/td>\n\t\t\t\t | 2.07<\/td>\n\t\t\t\t | Apar Industries Ltd.<\/td>\n\t\t\t\t | 3.57<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Cipla Ltd.<\/td>\n\t\t\t\t | 1.94<\/td>\n\t\t\t\t | Kaynes Technology India Ltd.<\/td>\n\t\t\t\t | 3.46<\/td>\n\t\t\t<\/tr>\n\t\t<\/tbody>\n\t<\/table>\n\t<\/div>\n\t<\/center>\n\n\tData as of July 31, 2024
\n\tDo note past performance is not an indicator of future returns
\n\tThe securities quoted are for illustration only and are not recommendatory.
\n\t(Source: ACE MF, data collated by PersonalFN Research)<\/span><\/center>\n\t \n\n\tThe Bandhan ELSS Tax Saver Fund focuses heavily on large-cap companies, with its top holdings including HDFC Bank Ltd. (5.40%), ICICI Bank Ltd. (5.08%), and Reliance Industries Ltd. (4.82%). These are among India's leading blue-chip companies, representing strength in the financial sector and industrial giants.<\/p>\n\n\t Sectorally, the fund leans towards financial services, with major investments in top Indian banks and financial institutions. It also includes companies from telecom, such as Bharti Airtel Ltd. (2.49%), and the power sector with investments in NTPC Ltd. (2.32%), reflecting its broad-based exposure to the Indian economy.<\/p>\n\n\t The Motilal Oswal ELSS Tax Saver Fund presents a more sector-agnostic approach with a bias towards mid-cap and growth-oriented companies. Its largest holding is Zomato Ltd. (7.51%), a leading player in the food delivery industry, reflecting a strong focus on emerging sectors and companies with high growth potential.<\/p>\n\n\t Similarly, Trent Ltd. (6.69%), a major retail company, and Prestige Estates Projects Ltd. (5.00%), a real estate developer, highlight the fund's preference for consumer-focused and real estate sectors, catering to India's urban growth story. Additionally, companies like Inox Wind Ltd. (3.80%) and Bharat Dynamics Ltd. (3.78%) suggest exposure to industrial manufacturing and defence sectors, which are positioned for long-term growth due to government initiatives and global demand.<\/p>\n\n\t Investors looking for stability and a focus on large-cap companies may prefer the Bandhan ELSS Tax Saver Fund, given its reliance on established players in critical sectors like banking, IT, and energy. In contrast, those with a higher risk appetite who are looking to capture significant growth from emerging sectors may find the Motilal Oswal ELSS Tax Saver Fund a better choice.<\/p>\n\n\t Both funds appear to have a significant allocation across sectors, which is common for many ELSS funds. This could be a good choice for long-term wealth creation but also carries inherent market risks associated with the various sectors.<\/p>\n\t<\/li>\n\t \n\tExpense Ratio of the Schemes<\/strong><\/p>\n\n\tWhen comparing ELSS funds, the Expense Ratio, which represents the annual fee charged, plays a crucial role in determining your returns. Here's a quick breakdown of Bandhan ELSS Tax Saver Fund vs. Motilal Oswal ELSS Tax Saver Fund:<\/p>\n\n\t \n\t\n\t \n\t\t\n\t\t\t\n\t\t\t\t| Scheme Name<\/td>\n\t\t\t\t | Direct Plan Expense Ratio<\/td>\n\t\t\t\t | Regular Plan Expense Ratio<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Bandhan ELSS Tax Saver Fund<\/td>\n\t\t\t\t | 0.63%<\/td>\n\t\t\t\t | 1.74%<\/td>\n\t\t\t<\/tr>\n\t\t\t | \n\t\t\t\t| Motilal Oswal ELSS Tax Saver Fund<\/td>\n\t\t\t\t | 0.65%<\/td>\n\t\t\t\t | 1.83%<\/td>\n\t\t\t<\/tr>\n\t\t<\/tbody>\n\t<\/table>\n\t<\/div>\n\t<\/center>\n\n\tData as of July 31, 2024
\n\tDo note past performance is not an indicator of future returns
\n\tThe securities quoted are for illustration only and are not recommendatory.
\n\t(Source: ACE MF, data collated by PersonalFN Research)<\/span><\/center>\n\t \n\n\tMotilal Oswal ELSS Tax Saver Fund has a marginally higher expense ratio than Bandhan ELSS Tax Saver Fund in both Regular and Direct plans. However, both funds are considered to have moderate expense ratios relative to the ELSS category peers.<\/p>\n\n\t While the difference between the two funds' expense ratios is minimal under the regular plan, even a small percentage point difference can accumulate over time and impact your returns. However, under the Direct plan, the Bandhan ELSS Tax Saver Fund offers a lower expense ratio and attracts investors being a cost-effective option for investors.<\/p>\n\n\t Remember, a lower expense ratio translates to potentially higher returns over time, but a lower Expense Ratio should not be the only factor to be considered while investing in ELSS.<\/p>\n\n\t [Read: <\/strong> How to Select the Best ELSS for Tax-saving in 2024<\/a>]<\/p>\n\t<\/li>\n\t\n\tSuitability of Investors to the Schemes: <\/strong><\/p>\n\n\tBandhan ELSS Tax Saver Fund<\/strong> is suitable for investors who seek moderate risk with balanced growth. Its focus on a diversified portfolio allows investors to mitigate risks associated with market volatility, making it appropriate for those with a moderate risk appetite and a long-term investment horizon. Its investment strategy is relatively conservative compared to funds that take concentrated bets.<\/p>\n\n\tThis fund is ideal for first-time equity investors or those who prefer a more stable equity portfolio with exposure to a variety of sectors and companies. The three-year lock-in period works well for investors who can stay invested for longer periods to benefit from the potential upside of the equity market, while also gaining tax advantages.<\/p>\n\n\t Motilal Oswal ELSS Tax Saver Fund<\/strong> is suitable for investors who are willing to take on higher risk for the possibility of higher returns. It is not recommended for conservative investors who may be uncomfortable with periods of volatility. This fund is more appropriate for experienced equity investors who understand the risks of concentrated bets and are looking for higher capital appreciation in the long term.<\/p>\n\n\tHowever, investors should be prepared for short-term market fluctuations, as the fund's performance is tied to overall market conditions.<\/p>\n\t<\/li>\n<\/ul>\n\n\n\n To summarise…<\/strong><\/p>\n\n\n\nBoth Bandhan ELSS Tax Saver Fund and Motilal Oswal ELSS Tax Saver Fund are strong contenders in the ELSS category, offering tax benefits and potential long-term growth. While DSP ELSS has demonstrated consistent performance and a robust investment approach, Nippon India ELSS has shown promise with its focus on specific sectors.<\/p>\n\n\n\n Bear in mind that both funds remain subject to market risks. Ultimately, a thorough evaluation of your risk appetite, investment horizon, and portfolio needs will guide you towards the ELSS that best aligns with your financial goals. Remember, diversification across the best ELSS mutual funds can further manage risk and optimise your tax-saving strategy.<\/p>\n\n\n\n This article first appeared on PersonalFN\u00a0here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"In the current landscape of financial markets, 2024 has ushered in a period of notable volatility and uncertainty. Investors are grappling with fluctuating economic indicators, shifting global policies, and domestic policy changes that have introduced both opportunities and risks. 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