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UTI Long Term Equity Fund:Twin Benefits of Wealth Creation and Tax Savings


As the time passes so quickly, another fiscal year is turning to an end soon, and most of the tax payers must be in the state of panic about keeping the things in order. They might also be planning to approach their Financial Advisor, or Chartered Accountants, to know the different ways which can help reduce tax liability and also thinking how one could reduce the tax loads to the minimum. One can indeed minimize their tax burden but utilizing the various investment options admissible by the government to reduce the tax impact. And one of the most promising avenues is the Equity Linked Savings Scheme (ELSS).

UTI Long Term Equity Fund:Twin Benefits of Wealth Creation and Tax Savings

ELSS funds are a category in the mutual fund product basket which allows the investors to reap the multiple benefits of investing. ELSS Mutual Funds are best known for the tax benefits they provide. Further, the advantages of investing in an equity securities are also added to it. Most people compare them with other tax saving instruments like PPFs, NSC, FDs, etc., primarily because of providing similar tax benefits. But, ELSS offers multiple benefits with that of the other tax instruments. While, ELSS enables for deduction of up to Rs. 1.50 lakhs on total taxable income each financial year, it may also provide benefit of wealth creation to fulfil one's future requirements/goals. Also, ELSS comes with a Lock-in period of 3 years only. Which may minimise the risk of market volatility in the short term.

UTI Long Term Equity Fund (Tax Saving) is one such offering which is creating wealth for its investor since Dec-1999. The Fund is an Equity Linked Saving Scheme (ELSS) providing dual benefits of sound returns potential by investing in equity securities and also savings on taxes. The Fund has AUM of over Rs. 1,000 Crores with over 1.72 lakhs unit holder accounts as of March 31, 2020. The Fund attempts to invest in businesses having healthy return ratios, cash flows and run by sound managements, with an aim to provide superior risk adjusted return.


The Fund invests across the market capitalization spectrum of large, mid and small with a blend approach of investing in both growth and value stocks. The Fund has about 64% invested into Large Caps and remaining in Mid & Small caps as on March 31, 2020. The scheme's top holding consists of HDFC Bank Ltd., ICICI Bank Ltd., Infosys Ltd., HDFC Ltd., Axis Bank Ltd., ITC Ltd., Bharti Airtel Ltd., Gujarat Gas Ltd., Crompton Greaves Consumer Electrics Ltd. and Jubilant Foodworks Ltd. which accounts for over 44% of the portfolio's corpus.

UTI Long Term Equity Fund (Tax Saving) may be suitable for investors looking for funds that are not large cap biased as the lock-in period of 3 years the fund allows for a longer investment horizon for the portfolio, thus raising the probability of generating higher risk-adjusted returns. Further, investment of up to Rs. 1.50 lakhs in this scheme is eligible for tax benefits under sec 80C of the Income Tax Act 1961.

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