I compared ELSS (Equity Linked Saving Scheme) mutual funds on the basis of their AUM (assets under management) size and past performance in 6 months, 1 year, 2 years and 3 years.
Finally following funds were found to be good.
Canara Robeco Equity Tax Saver, Sundaram BNP Paribas Taxsaver, HDFC Taxsaver, SBI Magnum Tax Gain Scheme 93 – Dividend, Franklin India Taxshield – Growth, DSPBR Tax Saver, Fidelity Tax Advantage
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Thank u sir,and say suppose i have already invested in birla tax relief and if i want to invest further in it...will my earlier investment be further extended to three from my present date of investment?also HDFC TAX Saver Growth NAv is on the higher side so plz is it ok to invest?
@Vinay
3 years lockin is calculated from the day units are allocated to you.
Lets say, If you have purchased 100 Rs in Feb 2006 for 100 units, you can sell 100 units in Mar 2009.
If you buy more 100 units in same fund in 2008, these 100 units are sellable in 2011 and earlier investment won't be impacted by that.
No of units and NAV does not matter, its the percent profit you make out of it that matters. If a fund with NAV 10 rises upto 11 and a fund with NAV 100 rises to 110, return is same 10%
hi i have invested in sbi tax gain 93. my question is why it does not come in recommendations of most finance weekly s. thank you
@Sony
SBI Tax gain is good overall, but some other mutual funds has outperformed it, in last one year.
Its best that you compare returns of all mutual fund for last 6 months, one, two, three years and decide yourself which one is good. However past performance is not a guarantee of future.
hi thank you sir, but is int it difficult to campare a fund that was started last year -when sensex was down, and they where able to make some good profit out of it- with a fund that was there at the time and made someloss. but now both are in a level field. but my question was not that. why the sbi tax gain is not at all mentioned in finance magazines. is there anything i am missing here about it
@Sony
It better that you don't buy a fund started last year as its not enough time to test the fund.
Some of the funds may have invested in safer avenues, to make +ve profit. More the risk and more the gain in stock market, so for sure when market will rise back, these fund will give less return than some others.
There are older funds also who have tasted the bad and good times and came out well.
Finance magazines are nothing but a marketing channel. Its like Outlook and other's rating on MBA colleges in india, or Times of India's movies review.
Its better that you yourself compare the performance on based on stats (Past Return, Portfolio, Assets under management etc.)
the biggest problem with the SBI tax gain 93 has been its huge bloated Fund Size. This will be big load for the Fund manager to carry and deliver the returns. The Fund could be just an average performer going forward.
Preferably invest in Religare Tax Plan
thank you sir. now my mind is little clear. what about the new tax relief on infrastructure bond. does it apply this year. and where do i get it from.
@Sony
The current budget has introduced an additional deduction of Rs 20,000 for infrastructure bonds. This is over and above the limit of Rs 1 lakh under Sec 80C which is available for several instruments including life insurance. Infrastructure bonds usually are of 5 to 10 years duration.
IDBI was one of the regular issuers of such bonds in the past. You will need to watch for such issues to come. Now that the budget has provided this benefit, you can expect to see some public issues of infrastructure bonds.
@Sony
Also, this will apply from next financial year 2010-2011.
I read all ur posts, much useful for all of us... Thanks for the info...
I plan to invest around 6,000 or 8,000 pm in ELSS schemes with SIP option. But i dont know which funds are best(as lot of funds exist).
1. Suggest me 4 good ELSS funds for 3 to 5 years.
2. Pls advice whether i can invest whole amount in 1 fund(HDFC Taxsaver) or good to invest in several funds?
3. which option dividend or growth is best? (I need long term gains)
4. I have to start invest in march or april for FY2010 tax saving?
5. Where i can approach for opening this SIP, and monthly how i pay the SIP amount? Via Online or Manual?
6. Using Icici direct account is best or I feel its better to open with any agents for proper guidance and support? (Both have entry load or not)
7. How to avoid entry load?
Please suggest me…
Thanks in advance…
@Mothilal
1,2. You can invest in ICICI Pru Tax plan, HDFC Tax saver, Birla Sunlife Tax relief and Franklin India Taxshield.
3. Invest in growth option.
4. You can start in April 2010 for FY 2010.
5. All of the above funds (in point 1) have online SIP facility, through which amount will automatically deducted from your account and SIP can be started online. But for starting this, you must already have an online account with the fund house. If you are already invested in these AMCs, you can apply for HPIN for online access. If you don't have folio in these AMC, you have to fill form and submit to nearest Karvy and CAMS center.
6,7. There will be no entry load for applying. Neither through any of the Online Broker (like ICICI direct) or Agents, as entry load has been abolished from all mutual funds. But they may charge you providing their services. If you choose to apply directly yourself, there will no extra charge.
I also suggest that you read below posts:
http://www.pankajbatra.com/finance/best-way-to-apply-in-sip/
http://www.pankajbatra.com/finance/mutual-fund-investment-with-zero-entry-load/
http://www.pankajbatra.com/finance/liquid-mutual-fund-saving-account/
Hi Pankaj,
Thank you very much for your kind information...
1. "You have suggested me the funds ICICI Pru Tax plan, HDFC Tax saver, Birla Sunlife Tax relief and Franklin India Taxshield."
I am interested in HDFC Tax saver, Birla Sunlife tax as you said, but other two changes are
SBI Magnum taxsaver and
Sundaram BNB paribas taxsaver...
Please suggest me about these four funds are right to choose or not...
2. Is there any variations in birla sunlife taxsaver 96 and birla sunlife taxrelief. similarly SBI Magnum taxsaver 95 and SBI Magnum taxsaver.... Pls tell which are the correct fund to choose.
@Mothilal
Sundaram and SBI Magnum are also good, you may go with them.
Actual full name of birla tax saving MF is Birla Sun Life Tax Relief ‘96, and that of SBI is SBI Magnum Taxgain Scheme 1993
Hi Pankaj,
This year i have to invest around 60000 to reach 1 lack under 80c. What are the best options, Can I invest in mutual funds total amount, please suggest me how much can I invest in different MFs.
Waiting for your response.
Thanks,
Ram
@Ram
Yes, you can invest whole amount of 60K in mutual funds. I would also recommend that first you get a term insurance also, in case you don't have one, for a cover for atleast 60-70 times your monthly salary.
Among mutual funds, you can invest in ICICI Pru Tax plan, Birla Tax relief, Franklin India Taxshield, HDFC Tax saver and Sundaram BNP Paribas Taxsaver.
Hi Pankaj,
I am already having an demat account in apollo sindhoori. Now i want to invest in SIP in ELSS. Is it possible to buy through my demat account.
@Mothilal
Please contact your apollo sindhoori regarding same.
You may also apply directly to mutual funds, Read following posts for more details:
http://www.pankajbatra.com/finance/mutual-fund-investment-with-zero-entry-load/
http://www.pankajbatra.com/finance/liquid-mutual-fund-saving-account/
http://www.pankajbatra.com/finance/best-way-to-apply-in-sip/
Hi. Pankaj,
I am laready invested in SBI Magnum, Reliance & ICICI Pru, all tax saving funds with Growth Options. To diversify, I am looking at other funds.
I hear a lot about Canara Robeco Tax saving Fund. How it compares to HDFC tax saving Fund. Or shall I invest partly in both? Please advise.
Or could you suggest any other fund for Tax saving purpose? I need to invest about 25K.
Thank You in Advance
@Purshottam
You can invest further into HDFC Tax savings fund. Canara Robeco is good so far but its not that old and has not seen good/bad times, wheras HDFC fund has withstand all seasons and is there in market from past many years and performing.
You may also consider Sundaram BNP Paribas Taxsaver, Franklin India Taxshield, Birla Sunlife Tax relief and Fidelity Tax Advantage.
canara robeco equity tax saver fund has started in 1993 and has given good returns so far.
@Nilesh
Thanks for the input. I will surely add this to list of best tax saving MFs.
Tax Saver Funds: ICICI Pru, HDFC, Franklin & likes have given average return of 55% to 60%. Canara Robeco has given 82%. I split my 25K in between Canara Robeco & HDFC to diversify my portfolio.
Thank You for advise
whould I get tax benifit if I invest on 30th March in SBI magnum?
@Sisodiass
Yes, you will get tax benefit even if you invest on 31st march.