What do you think about Quantum Tax Saving Fund?

[arroy_0209]

What is your opinion about Quantum Tax Saving fund? Is it better than HDFC taxsaver? How does it compare with Canara Robeco Eqt Tax Saver?

 

[asterix24]

Dear Friend,

Quantum Tax saver has been around for only 2 years i.e. starting of 2009 which was around the culmination of a bear phase and start of a stupendous bull phase. During these 8 quarters, it has delivered some good returns. Compared to it's peers, it has delivered some decent performance. However, a comparison of Qtr-on-Qtr numbers show that it hasn't been able to match upto the performance of far more established players.(Reference: Comapre FY2009-Q2 performance)

Another point of interest is the performance during bull-bear-bull phase. As an investor, I would like to know how the fund management handles these swings and volatility and how my capital is preserved. For Quantum Tax Saver, we don't have this data and hence, it's very difficult to take a judgment call. This fund hasn't yet been rated by VROL also.

Coming to the peers, both HDFC Tax Saver and Canara Robeco Tax Saver are pretty good long standing funds, both being rated with 5 stars by VROL. However, a comparison of expense ratios show that HDFC Tax Saver is a marginally better bet as compared to Canara robeco due to it's lower expense ratio.

However, if you are looking for a good fund with a decent track record, I can even suggest Fidelity Tax Advantage which has performed fairly well over past few years.

Happy Investing !!

 

[arroy_0209]

Thanks for your reply.
I noted the comparison at VROL and they take into considerations the factors: risk grade, return grade, one year return and expense ratio. However I have problem in choosing the best fund based on these parameters. What weightage should be given to different factors? For example, exp ratio is lower for HDFC taxsaver and so is its 1 year return compared to Fidelity tax adavantage. Also Fidelity's is of low risk grade but HDFC taxsaver is of below average risk grade. How do I convert these into quantitative factors to decide which fund is better. Which one should I choose? Also why are they considering only 1 year return at VROL? why not 3/5 years?

Finally let tell you my problem: I had invested in HDFC taxsaver and my SIP is continuing. Should I stop it and go for Fidelity tax advantage?

 

[asterix24]

Dear Friend,

I am at loggerheads on how to answer your query. I can definitely identify with your dilemma and can appreciate your confusion. However, in times of these confusions, I would suggest that you can go with your gut-feel on which you like. See, HDFC Tax Saver, Canara Robeco and Fidelity have been around for sometime and have shown good performance and so also has HDFC Long Term Advantage.

One of the parameters I definitely look is the performance under bull-bear-bull which means performance Q-on-Q for last 3-5 years, which is one of the reasons I can't solidly justify Quantum tax saver. Personally, I don't look into the mathematical formulae (though being a worshipper of math). I quote a signature from another forum. Quote:"If we could predict markets through formulae, then all mathematicians and statisticians would have been millionaires"

Performance in a given band should be fine i.e. if some fund X has given 40%, as long as another fund gives X +/- delta% return, it should be fine, where delta can be around 1-5 percent. Over a long term, almost all good funds average out the performance.

Coming to your specific question, I feel you can continue for HDFC Tax saver for one more year and revisit the same next year same time. This is my personal feeling and would definitely advise you to take the final call.

Happy Investing !!

 

[vishal412]

Quantum Tax saver is not a very old fund, but its performance is good in bull phase, there are other Tax savers also which are also giving you good results, like HDFC, Fideiliity, DSP Tax saver also. Quantum can also be a good choice.