BNP Paribas Tax Advantage Fund is managed by Shreyas Divalkar. The scheme aims to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity related securities along with income tax rebate, as may be prevalent from time to time. New investors can skip this fund for a better performing fund in this category. If you have already invested in this scheme keep a close watch on its performance.
BNP Paribas Tax Advantage Fund is a midcap oriented tax advantage fund which means your money will be invested stocks of medium and small sized. Large cap companies tend to be stable compared to mid-cap and small cap companies. This fund has 60.84% exposure to large companies, about 18.94% exposure to medium sized companies, and 20.22% exposure to small cap companies.
- Saving on tax outgo
- Child's education
- Child's marriage
- Planning for retirement
- Home Purchase
- Creation of wealth
- Short term needs
- Lifestyle needs
If you had invested Rs 1 lakh when the fund was launched in Jan 2006, your value of investments would be around Rs 1.63 lakhs. If you had invested Rs 1 Lakh for 5 years, your value of investments would be Rs. 1.1 lakhs The performance has not been similar to other midcap funds. It has been giving around 6.99% returns for those who have stayed invested since inception.
Assume you had invested Rs 10,000 every month in BNP Paribas Tax Advantage Fund through SIP since inception today you would have around Rs 8.14 lakhs.
Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.
Mutual fund schemes that have exposure to mid-sized companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.
There is a lock-in period of 3 years on this fund, which means that you cannot sell this fund within 3 years of your purchase date. Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.
Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a quarter. Look out for news and developments that can affect the sector as a whole.
A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.
If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of BNP Paribas Tax Advantage Fund is 2.91%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.
The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. BNP Paribas Tax Advantage Fund qualifies for sec 80C ELSS benefits, which means you can invest up to Rs 1 lakh a year in this fund and deduct the amount from your gross total income for computing income tax.