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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Hi Pankaj,
I am looking to invest around 1 lakh in tax saving mutual fund. However, I do not want to take the risk of equity. My investment horizon will be 3-6 months. If required, I can make a premature withdrawal also. Kindly suggest a suitable debt or money market scheme. Also advise, what will be the implications, if I make a premature withdrawal.
@Aditya
Tax saving mutual funds are equity based and contains risk. Also there is a lock-in for three years. There is no premature withdrawal.
For such small investment period, you should invest in FMP (Fixed maturity plans) or Liquid/Liquid Plus mutual funds.
FMP may have exit load if funds are redeemed before the end date. Most of the Liquid and liquid plus mutual funds do not have any exit load.
Hi Pankaj,
I have investment in two SIPS plans: ICICI discovery and DSP Blackrock Small and Mid-cap. However, my portfolio manager has gone for the dividend option in ICICI and dividend reinvestment option in DSP instead of growth. I wasn’t sure if the dividend portfolios in these funds will be the same as the growth portfolio. I had the following questions:
1. Will the companies invested in differ between the growth and dividend options? If not, should the dividend reinvestment and growth yield the same result in the long run?
2. If I am looking to invest 3 lacs in a mutual fund considering the markets are at a low, which 100% equity fund would you suggest and why?
Thank you.
Regards,
Dino
@Dino
There won’t be any difference in mutual fund portfolio in case of growth and dividend options. dividend reinvestment and growth will give same result in long rum.
Please don’t invest this huge sum as lump-sum in market. Better you can invest in MIP and slowly do transfer to equities through STPs.
Hi Pankaj,
My age is
Currentlt I am investing in
LIC-Jeevan anand and Bhima gold-36K per annum
I want to invest 2000 per month in two different ELSS,which gives good return.
Kindly suggest.
@Banti
You can choose from Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage
Hi,my annual ctc is 301500(270000+11500 gratutity)…i also deduct 2000 to my food card to save tax .so how much I can invest to save tax and if I want to spend on elcc,where I should go,i m very new to all these
@Pankaj
Please read answers to similar questions here:
http://www.socialfinance.in/questions/7/tax-saving
http://www.socialfinance.in/questions/46/investment-suggestions
http://www.socialfinance.in/questions/45/investment-advise
http://www.socialfinance.in/questions/82/tax-exemption-component-for-salaried-employee
http://www.socialfinance.in/questions/118/tax-saving
http://www.socialfinance.in/questions/178/investment-advise
How is the AXIS Tax Saver MF?
@Sudip
There are many better funds available in the market. Why you want to go with Axis Tax saver.
Because this fund have allocated their asset maximum in Banking & Finance Sector (abt 22%) and Technological sector (mainly software firms), which may be the frontrunner in future growth of nation.
@Sudip
Axis tax saver fund is relatively new (just over a year old).
Although it has given maximum return in tax saver category in last one year, but still fund does not have a long term records.
There are other funds in tax saving categories which have seen good and bad times of market and yet came out with a good record.
Regarding portfolio of this fund, around 40% is invested into Banking/Finance and Tech sector. Other good funds too have similar portfolio.
Hey Pankaj,
Thanks for helping out last time around when I posted in December last year. Per your recommendations I invested around 80k (40k each, lumpsum) in HDFC and Canara Robeco Taxsaver schemes. However, both these funds are in the red, the NAVs are lower than what I invested at then. I need to do another investment (again around 80K). Though this time I’ll def go for an SIP. What taxsaver schemes would you recommend? Do these two (HDFC and CanRob) still hold? And, considering that I already have 80k invested in them, would it make sense to diversify into other ELSS schemes?
@SC
Markets have not been performing very well for last six months. If you see, most of the tax saving funds are negative in last six months. Equity investments are riskier but generally over a long period of time (> 5 years), they generate better returns than other forms of investments.
These funds are still one of the better funds available in the market. If you would have invested through a SIP, cost would have averaged out and the portfolio would have been showing green (or very small red).
I would still recommend you to pick from these funds: Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage
Great. I agree that lumpsum investment wasn’t prob a good idea. Thanks for the advise pankaj, much appreciated!
HIi Pankaj,
I am considering Quantum Long term fund. I am not invested in any other fund as of now. Please advise me on this fund. For tax saving I am going for Can Robecco.
Thanks
@Shalabh
In the same category as Quantum Long term, I would advise you to choose HDFC Equity fund.
I would also suggest you to compare other funds like Birla Sunlife Frontline equity fund, HDFC Top 200 Fund, DSP Blackrock Top 100 fund, Reliance Regular Savings – Equity and
ICICI Pru Discovery Fund.
Dear Pankaj,
I have decided to invest INR 5000 in any tAx saver mutual fund, I have shortlisted two funds – either Can Robeco or Fidelity tax advantage. Pls suggest which one should I go for the investment.
@Sudip
Both are equally good funds. If you have to choose one, go with Fidelity Tax advantage.
what are the best tax saving techniques you suggest for sir??
@Khushwant Singh
Please read answers to similar question here:
http://www.socialfinance.in/questions/7/tax-saving
http://www.socialfinance.in/questions/45/investment-advise
Hi Pankaj, I want to invest a lum sump amount of around 1 lakh in mutual funds, so which are the good mf for that. And is it a good option to invest lum sum? I’m currently having one ELSS and 2 SIP (DSP black rock top 10 & HDFC top 200) of 2000 each, so shall i go for sip or there are some mf for one time investment? Thanks in advance!!
@Nitin
If you want to invest into equity based mutual funds, lump-sum is not a good idea. You can put money into a liquid/debt fund and start a STP (systematic transfer plan) to move investment into equity gradually.
Also, for how long, you want to remain invested in this investment. If its less than three years, better not to invest into equities.
Thanks Pankaj. Actually I want this investment for 2-3 years only as I’m planning to have few more SIP for my long term investments. Then is Gold EFT a good investment at this time as I was thinking of investing this amount in Gold EFTs in a 6-12 month SIP? I was thinking of SBI and GOLDBEES. Are there any other better options also?
@Nitin
Gold is not a good option at this point as rates may fall sharply.
Its better that you put your investment into balanced mutual funds or FMP, in case investment period is 2-3 years only.
Thanks a lot Pankaj for the valuable advise. :o)
Dear Pankaj
I want to invest a lumsum of INR 50,000 in any Mutual fund for my child. If you can suggest a suitable fund for that.
@Sudip
Putting 50,000 lumpsum won’t be a good idea. Better if can deposit this amount to liquid mutual funds and start an systematic transfer to equity diversified and balanced mutual funds.,
For equity funds, you can choose from DSPBR Top 100 equity, HDFC Equity and HDFC Growth
For balanced funds, pick from HDFC prudence, HDFC Balanced, HDFC Children’s Gift and Birla Sunlife 95.
Hi Pankaj,
I want to know about how good is to invest in FMP.? (Not from Tax Savings objective) only in terms of making profit.
How is DSP BlackRock FMP – Series 3 – 3M. and DSP BlackRock FMP – 6M – Series 9 ?? It is also written on their website that, Date of Maturity *October 11, 2011
Date of PayoutOctober 12, 2011 for 3M? What is this?
Can you tell us what is the procedure of Buying and Selling this FMP? Cant we keep this shares after Maturity on 3 months? Can we buy this using DMAT account?
@Vicky
FMP is a good substitute to Bank fixed deposits.
As of now FMP can generate 9-10% annual returns (not guaranteed). These are closed ended mutual funds. Investment can be done in these fund only for a fixed time and after that it matures on date prescribed.
There are FMPs for 3 months to 3 years duration. You investment will be locked for this duration.
As per your selected FMP, DSP BlackRock FMP – Series 3 – 3M is a 3 months fixed plan and you will get your amount back with interest on Oct 12, 2011 in bank account.
You cannot keep investment after maturity, it will automatically paid out after that.
You can buy FMP like any other mutual fund. There is no need to have Demat account. You can fill hard copy form and submit to mutual fund/CAMS/Karvy office. Or you can invest online too. Read more here: http://www.pankajbatra.com/india/how-to-transact-mutual-funds-online-directly/. If you have a investment/trading account (like ICICI securities, Kotak securities, Indiabulls etc.) it can also be bought from there.
@Pankaj:
Does the actual amount remains constant without any risk in FMP like the case in Fixed Deposit? OR the original investment amount may also go up and down based on Market conditions?
@Vicky
FMP is an investment in risk free avenues like Govt bonds and other debt instruments.
It won’t go down like stock market, but returns will be dependent on interest rates in market. As per current interest rate situation, it won’t fetch less than 9%.
Dear Pankaj Sir,
I invest 7000/- Yrly in LIC money back policy.
12000/- Yrly in LIC Jivan Saral policy.
9000/- Yrly in LIC Jivan Surbhi policy.
3000/- Monthly in GPF.
15000/- Yrly in HDFC Tax saver.
600/- Monthly in Sahara recruing account.
I also want invest 11000/- Yrly in Reliance Endowment insurance policy. Please suggest me. My portfolio is right or wrong. Reliance Endowment insurance policy is good or bad? My annual income is 250000/- only.
@Amit
Unfortunately, you have treated insurance plans as investment. Your portfolio is not very good.
Insurance is all about safety and covering one from risk. It should not be seen in point of view of returns.
Do you think, 5-7% returns provided by insurance plans is good enough in long term?
If you want to maximize returns on your returns and also want to cover you and your family, please follow following plan:
1. Get a term insurance for yourself for atleast 30-40 lacs sum assured. It won’t cost much.
2. Get a family floater medical insurance to cover yourself and yourself from medical expenses.
3. Invest remaining amount into mix of Diversified equity based mutual funds (through SIP), GPF/PPF/NPS and Fixed deposits/FMP. HDFC tax saver investment, done by you, is good.
If you can exit from these policies (LIC money back, Jivan Saral, Jivan Surbhi and Sahara recurring account) without any much loss, you should consider it.
Dear Pankaj,
Kindly suggest me on buying mutual fund using FUNDSINDIA online service.
@Sudip
You can buy mutual fund directly too as well as from sites like FundsIndia etc.
You can read more about mutual fund investment methods on following links:
http://www.pankajbatra.com/india/how-to-transact-mutual-funds-online-directly/
http://www.pankajbatra.com/finance/mutual-fund-investment-with-zero-entry-load/
http://www.pankajbatra.com/finance/best-way-to-apply-in-sip/
Hi Pankaj ,
I have already Rs. 6000 for below 4 funds:
HDFC TOP 200- 2000/per month
HDFC Equity-2000/per month
DSP BR Top 100 Equity-1000/per month
Reliance Regular savings Balanced-1000/Per month
I want 2 invest Rs 2000 more for 2 more funds(1000 for each).
Can u pls suggest me which one is better?
1.HDFC Mid-cap opportunities or DSP BR small and Mid cap(1000/)
2.HDFC Balanced or HDFC Prudenced or Birla SL Frontliner(1000/)
Pls suggest which one is better to get the profit?
Thanks,
Souradeep
@Souradeep
You have picked up good funds in different categories.
DSPBR Top 100 comes under Equity large cap, HDFC Equity under Equity Multi Cap, HDFC Top 200 under Equity Large & Mid Cap and Reliance Regular Savings Balanced under balanced fund.
In small and mid cap category, you can pick from IDFC permier equity, ICICI Prudential Discovery Inst I, HDFC Mid-Cap Opportunities and DSPBR Small and Mid Cap Reg.
In balanced segment you can pick up HDFC Prudence or HDFC Balanced.
Profit/loss in these funds cannot be predicted and past performance may not also be repeated in future.
Hi Pankaj,
I am going to invest in 3 more funds.
For small and mid cap: HDFC mid cap opportunity and DSP BR small & mid cap(1000 fr each).
For Balanced segment: HDFC Balanced fund(Rs. 1000)
I ll take my decision once getting confirmation from ur side.
so can u pls make me confirm is it a right decision to invest with these funds?
Thanks,
Souradeep
@Souradeep
All these are good funds and you may go with them.
@Pankaj,
I have 2 choose one between two midcap fund(DSP BR small and mid cap and ICICI pru discovery). which one should i go for?
Thanks,
Souradeep
@Souradeep
You can pick DSP BR small and mid cap fund from these two.
You may also consider IDFC premier equity.
Hi Pankaj, I am holding RELIANCE DIVERSIFIED POWER SECTOR FUND-RETAIL GROWTH PLAN @68.4679(including entry load)purchased in May 2008. Currently the NAV for the fund is the same after 3 yrs. Do you reccomend to keep this fund or should i disburse this from my portfolio ?
@Dipakar
Reliance diversified power sector fund is a sectoral mutual fund which only invests in power companies.
Sectoral funds are riskier as portfolio is not diversified. We suggest you to switch to a diversified mutual fund.
Hi Pankaj,
I am quite impressive with your valuable blog. I am a IT professional and getting around 60K PM. My portfolio is like
1: PPF -36K
2: LIC – 35K
3: Term Plan – 9K(30lac SA)
4: Home Loan – Max 16K PM, Currently paying 5K as per the bank disbursed
5: HDFC Top 200 – 1000 PM
6: IDFC Primier Equity – 2000 PM
7: Mediclaim policy benefit from my company
Is my portfolio OK according to my investments? i have 1 yr old son and looking for secure future for my family. I am also planning to buy a car and one more home. Please let me know how can i make my portfolio more approachable to accomplish my targets and investments?
@Amyags
Its not easy to advise without knowing all details. It will be better if you can consult a financial planner. He may charge you some amount but will help you to achieve your goals.
However based upon what you have mentioned, your portfolio looks not that bad to me. It just has to be aligned with your long and short term goals.
Some small suggestions:
1. Increase term insurance sum assured to around 80L-1 crore. You can get ICICI Pru iProtect online term plan for around 10-11K premium.
2. 35000 in LIC does not seems to be good. Investment through insurance is a bad choice. insurance is only for safety and not for returns.
3. HDFC Top 200 and IDFC premier equity are good funds but have more exposure to mid/small cap stocks. Better is to add some large cap mutual funds.
4. Get a medical insurance for your family other than whats provided by employer. This can help you to insure you in case of a job change.
5. As soon as house is ready, get a home insurance to cover building and contents against natural calamities, theft and electrical/mechanical breakdown.
6. As you are planning to buy a car and one more home, start saving in Liquid fund, Fixed deposits/Fixed maturity plans based on tenure.
BTW, I am also an IT professional and runs this blog as a passion.
Dear Pankaj Batra Sir,
I am having around 20 lakhs in my hand as cash right now. I do not want to establish fixed deposit with this amount as already i am under high tax bracket. If i invest in fixed deposit at 9.25% also after tax it will be only 6.44 %. I am looking for a suggestion from your kindself. Can i go for investing all the amount in ICICI fmp going to open on 14th July with lock in period of 3 years. If I get an interest of 9 to 10 % without any risk of loosing capital and with this much of profit after tax i will be happy. Or if you have some other plans for me. Please guide me Sir. I will take the next step after your reply/suggestion/advise only.
@Anil
Your query has been answered on http://www.socialfinance.in/questions/975/how-should-i-invest-20-lakhs-cash-that-i-have-right-now-with-me
Hi Pankaj,
Kuddos to you for helping so much people.
Right now i have arround 6 Lacs annual income. I am investing 10500 in Lic Policy & around 25000 in PPF.
I want to invest Rs 5000 PM in any SIP or any thing which can give me tax benefit as well as higher returns.
Regards,
Pritam
@Pritam
This year you can invest into tax saving mutual funds.
From next year, there won’t be any deduction available for investment in mutual funds and you will have to invest in PPF or NPS (New pension scheme) to save income tax.
Hi Pankaj,
Thanks to you for helping so much people.
1.I am going to invest in HDFC Classic Assure plan for 20000/yr.right nw it is under 80C.I have a doubt regarding this, once Direct tax ll be applicable frm april,12 shall i get the tax benefit for the same?
2.One more question i want to invest in one LIC plan for 15K/yr for tax saving purpose as well as investment.can u pls suggest me which one is better plan and also i ll get the tax exemption from Direct tax?
Thanks,
Souradeep
@Souradeep
Please don’t pick an insurance policy for investment purposes.
Keep insurance and investment separate. Buy an pure term life insurance, which will give you good sum insured with very less premium. Tax exemption on this will continue even after DTC implementation.
Most of the plans which mixes insurance and investment are not worth buying. Instead, get a term insurance and invest remaining money in NPS/PPF.