Union KBC Tax Saver Scheme (UKTS)

An Open ended ELSS Scheme

Summary

Type	Open-ended Equity Linked Savings Scheme (ELSS) with a lock-in period of 3 years	Benchmark Index	BSE 100
Min. Investment: Add. Investment: SIP:	Rs 5,00 In the multiples of Rs 500 Min Rs 500 with minimum SIP period of 12 months	Face Value	Rs 10 per unit
Entry Load	Nil	Exit Load *	Nil
Issue Opens	November 08, 2011	Issue Closes	December 09, 2011

Investment Objective*

The primary investment objective of the scheme is to generate income and long-term capital appreciation by investing substantially in a portfolio consisting of equity and equity related securities.

However there can be no assurance that the investment objective of the scheme will be achieved.

 

*Source: Scheme Information Document

Is this fund for you?

Equity Linked Savings Scheme (ELSS) or Tax-saving mutual funds are diversified equity funds that offer investors an opportunity to save tax under section 80C of the Income Tax Act, 1961. The present limit under section 80C is limited to Rs 100,000 at present.

Union KBC Tax Saver Scheme (UKTS) is one such ELSS scheme from the stable of Union KBC Mutual Fund; which is a relatively a new player in the Indian mutual fund industry (it launched its first mutual fund scheme - Union KBC Equity Fund, a diversified equity scheme on May 20, 2011.

UKTS is a typical diversified equity fund (along with tax efficiency) with no bias towards any market capitalisation, thus following a multi-cap strategy. Hence, it will also look out for opportunities to invest in stocks across market segments (i.e. large cap, mid cap and small cap) along with promising sectors.

 

Portfolio & Investment Strategy

While discovering stocks and sectors for its portfolio UKTS will consider combination of top-down and bottom-up approach of investing. The top down approach shall involve analysis of the macro-economic factors, industry evaluation, benchmark industry allocation, market outlook etc. and shall be used to determine the asset allocation including cash levels and/or the target sector allocation. The fund management team shall also look out for opportunities in various market segments and shall evaluate the individual companies on their merits, leading to the bottom-up investment decision.

Moreover the individual companies would be analysed based on the following qualitative and quantitative factors before making them a part of the UKTS’s investment portfolio:

Quantitative Factors

 

• Financial strength
• Profit Margin
• Sales growth
• Return on Capital Employed (ROCE)
• Valuation






 

Qualitative Factors

 

• Business of the company and good track record
• Management and promoters
• Product profile
• Customer/market for the products
• Business risk






 

While allocating it assets among various asset classes - i.e. equity and debt, the UKTS will follow the below allocation pattern.

 

Asset Allocation Pattern

Type of Instrument	Allocation Range	Risk Profile (High / Medium / Low)
Equity and equity related securities	80%-100%	Medium to High
Debt and money market Instruments	0%-20%	Low to Medium

(Source: Scheme Information Document)

 

Fund Manager Profile

The fund will be managed by Mr. Ashish Ranawade who holds the position of a Chief Investment Officer (CIO) at Union KBC Mutual Fund and has to his credit a Bachelors degree in Engineering [B.E.(Electronics)] along with a Masters degree in Management Studies in Finance. He has over 16 years of experience in fund management and prior to joining Union KBC Mutual Fund, was associated with UTI Asset Management Company and ING Investment Management (India) Limited.

 

Fund Outlook

Given that the fund adopts a no sector or market cap bias approach for investing; it is theoretically well placed to benefit from the investment opportunities across the board. While investments in equity funds are considered to be high risk-high return investment proposition, the lock-in period of three years (since it is an ELSS) will inculcate a good habit amongst investors to stay invested for a long period of time. Also, the fund manager is relieved from the stress of redemption for three years due to the mandatory lock-in period which may allow him to go along with his conviction in stock picking (backed by research) and thus may help him guide its performance track record.

To know whether to invest in this NFO please subscribe here. If you are already a subscriber then please login here

 

Disclaimer: This note / article is for information purposes and Quantum Information Services Limited (PersonalFN) is not providing any professional / investment advice through it. The recommendation service, views, articles and other contents are provided on an "As Is" basis by PersonalFN. The facts mentioned in the note are believed to be true and from a public source. The Service should not be construed to be an advertisement for solicitation for buying or selling of any scheme / financial product. PersonalFN disclaims warrants of any kind, whether express or implied, as to any matter/content contained in this note, including without limitation the implied warranties of merchantability and fitness for a particular purpose. PersonalFN and its subsidiaries / affiliates / sponsors / trustee or their officers, employees, personnel, directors will not be responsible for any direct/indirect loss or liability incurred by the user as a consequence of his or any other person on his behalf taking any investment decisions based on the contents of this note. Use of this note is at the user's own risk. The user must make his own investment decisions based on his specific investment objective and financial position and using such independent advisors as he believes necessary. PersonalFN does not warrant completeness or accuracy of any information published in this note. All intellectual property rights emerging from this note are and shall remain with PersonalFN. This note is for your personal use and you shall not resell, copy, or redistribute this note, or use it for any commercial purpose. Please read the terms of use.

Add Comments

Comments
kcsharma056@gmail.com Apr 09, 2018 tsg-union kbc tax saver growth
smeindl@videotron.ca Dec 16, 2011 I'm grateful you made the post. It's declarer the air for me.

 1