Invesco India Tax Plan scheme aims to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities. It intends to invest across market capitalisation sectors utilizing bottom up approach. It will aim to have concentrated well researched portfolio, which would be around 20 – 50 stocks.
Invesco India Tax Plan that has managed to beat its benchmark in seven out of the eight years since launch, it has retained a four-star rating almost all its life. Designed to own some of the house’s best large-cap and mid-cap ideas, the fund prefers quality businesses with healthy growth. But it is careful about not going overboard on valuations. It does not take tactical cash or sector calls. After remaining overweight on mid caps until late 2015, the fund has shifted gears in the last one year. Its large-cap allocations have been raised from 60 to 70 per cent in the past one year, with mid-cap weights trimmed from nearly 40 to 25 per cent. This should hold the fund in good stead should the stiffly priced mid caps correct in the market.
The year-to-year returns of this fund show it to be equally good at navigating both bull and bear markets. It managed to contain downside to levels much lower than its benchmark during 2008 and 2011 and has outpaced it by big margins both in 2010 and 2014. The last one year has seen the fund outpace its benchmark, but it slightly lagged behind its category. This could be due to its higher large-cap tilt in a category that is largely multi-cap-focused.
This fund is a good choice for investors who are looking for a conservative approach to tax planning.