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 want to know that if we invest in a tax saving MF now, then we shall stop getting Tax benefit from March 2012… But our money would be lockedin for 3 years… So keeping that in mind is it right option now ?
And also in some of your post you mentioned “high expense ratio”… what exactly it means….??
@Shubham
Most probably tax saving mutual funds will be converted to equity diversified mutual funds after March 2012. But lock-in of three years will remain on earlier investments.
Amount investment in these will be safe and there is no harm in investment in these.
Expense ratio is percentage of AUM (assets under management) amount, mutual fund companies charges for managing mutual fund. This amount is used in fund manager’s salaries, operational expenses, marketing cost, agent’s commissions etc. NAV (net assert value) is automatically adjusted accordingly.
Thanks for the response Pankaj.
Can you pls also help me that how can I invest in different MFs online (as I am relatively new) do I have to take a Broker online account like sharekhan, reliance money or can I do with my online banking account (HDFC, ICICI)..??
@Shubham
If you don’t have demat account already, there is no need to open a demat/online trading account for transacting in mutual funds.
You can also open an investment account (mutual fund only) with HDFC (ICICI not sure) by filling up a form. Read more here: http://www.hdfcbank.com/personal/investments/mutual_funds/mutual_funds_buysell.htm
They may charge you on transactions towards services fees.
If you want better way to buy/sell mutual funds online, read one of our other article: http://www.pankajbatra.com/india/how-to-transact-mutual-funds-online-directly/
Hi Pankaj,
I want to purchase Spicejet shares.Is it good share to invest.I have heard next three years it will give good returns.Now it is trading at 23 rs.When it will reach rs 50.Its top value in 52 weeks is Rs 90.
@Santosh
We don’t provide stock tips. Nobody can tell what returns a stock can give in future.
Return on stocks is a function of multiple parameters like global market conditions, inflation, political conditions, growth and consumption rate etc.
And also ur suggestion whether it is right time to invest in Share market now,since market is going up due to purchase of Bluechip companies shares or should i wait for some time for market decline.
@Santosh
If you want to invest for a long period, say 10 years, you can buy large cap stocks now as market is bearish.
Hi pankaj,
I am following some shares 1. canara bank 2. corp bank 3.ongc 4. ioc 5.tata steel 6.ntpc. I am having 70,000 with me.
1. will i invest in shares or mutual funds? In which i will gain more?
2. how abt my choice of shares?Am looking for long term only.should i need to focus in two or three instead of seven?
3. i studied abt stp. pls explain that.
4.My mother is not having any inccome,she is having all the prrofs(pan card).is it better to invest this in her name?
Thank u so much
@Vignesh
1. We cannot forecast the gains on mutual funds or shares. It all depends on market conditions and stock/mutual fund you buy. Mutual funds are better if you want to play safe and have little time to research and stocks. As mutual fund manages your fund on your behalf it does not need your time. If picked correctly and timely, stocks may generate more returns than mutual funds but they also carry high risk too.
2. We cannot suggest shares at the point as we don’t do much research in that area.
3. STP is systematic transfer plan in which you invest into a mutual fund and systematically (monthly/quarterly etc) some units are redeemed and invested in other mutual fund. Its good when you want to start SIP in equity funds but already have some corpus. You can invest as lump-sum in a liquid/debt fund and start STP to a equity fund.
4. If you invest your money in your mother’s name (who does not have income), the gains will be taxable in your hands only and not on your mother’s.
Hi Pankaj,
I am investing in SBI Magnum tax saver through SIP. From past few months its not performing well. Should i stop sip in this fund and move to any other good tax saving fund or continue in SBI only.
@Divya
Since last few months, market is also not doing well because of bad economical conditions. This is one the reason for equity mutual fund’s bad performance.
However SBI is not best among tax saver funds and you can consider shifting to a better fund like Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver or Fidelity Tax Advantage.
Hi Pankaj,
I would like to ask what is a good Pension Plan option. I want to know if it is better to invest in a Mutual Fund SIP or if I need to take a traditional Pension Plan Insurance that is being offered by LIC, Bharti AXA, HDFC and other companies
@Ameet
If you invest with discipline then a mixture of EPF/PPF, New pension scheme and Equity mutual funds will be best option for your retirement.
Traditional pension insurance plans are not really good products from investment perspective. You should keep insurance and investment separate. For insurance needs, buy a term insurance.
Hi pankaj,
I want to start sip in mutual funds…But dont know my selection is worth investing
1.Reliance Banking fund- Growth —-1000(I guess in future Banking is goi to increase)
2.HDFC Top 200—————————-2000
3.Idfc small and midcap——————–2000/ Idfc premier equity( I have confusion in selecting between these two)
4.ICICI Prudential FMCG Fund———–2000 /SBI Magnum Sector Umbrella – FMCG Fund(once again confusion in selecting between two)
5Hdfc equity————————————2000
6.Birla Sun Life Dividend Yield Plus – Growth—-1000
I need your guidance……
Hi pankaj
I got your reply ..It went to spam that s y i posted here also.. sorry for asking the same question twice..
Thanks a lot
Hi Pankaj,
Currently I am investing 20,000 per month in SIP(Growth funds(HDFC , Black Rock. IDFC). Is it the good time to still continue with the SIP or just hold back for sometime till the time the market became stable
Regards
Rohit
@Rohit
SIPs are evergreen form of investment as it just averages out cost of buying. In some months market may be up, in some it may be down.
So you should continue investing into SIPs without fearing about market volatility.
Hi Pankaj,
Currently I am having a SIP of 5K each in the below funds. Please let me know is the selection is good. Please suggest any other good fund if you think any..
IDFC Small & Midcap Equity (SME) Fund:- 5000
IDFC Premier Equity Fund – Plan A Growth:-5000
HDFC Top 200 Fund – Growth:- 5000
DSP BlackRock Equity Fund – Regular Plan – Growth:- 5000
Regards
Rohit
@Rohit
Both IDFC Small & Midcap Equity (SME) Fund and IDFC Premier Equity Fund – Plan A Growth are small and mid cap funds. I would advise you to drop IDFC Small & Midcap Equity (SME) Fund and pick a large cap fund to reduce portfolio risk. In large cap you may choose from DSPBR Top 100 equity and Franklin India Bluechip.
This will also make sure that you have one fund each from categories: Large cap, Multi cap, Large & mid cap and mid & small cap.
Dear Pankaj,
Hope you are doing good. Its time to seek your valuable advise once again for current FY tax savings & investments.In regards to the Rs. 1.20 lakh limit for tax exemption,my contributions so far for this year are
1. LICs Jeevan Anand – Rs.10,500 approx
2. LICs New Bima Gold -Rs.26,800 approx
3. Employee PF – Rs.38,600 approx. The total adds to Rs.76000 approx.
FYI : Last year based on your suggestions I had invested in CanRobecco,
DSPBR & HDFC Tax saver funds (10k each) apart from LIC & PF and Rs.25k in
IDFC infrastructure bond.
1.Please advise and let me know the options for tax saving/investing the
remaining Rs.44000/-for this year??
2.Since ELSS will not be considered for tax exemption from next year, will it impact the performance / NAV of the tax saver funds? (Considering people might look
for alternate options for investment / tax saving)
Best Regards
Nagarajan
@Nagarajan
You may invest in same tax saving mutual funds as you did last year. It will be better if you invest through SIP rather than lum-sum. ELSS performance should not be impacted with discontinuation from next year. They would be converted to normal equity mutual funds next year most probably.
Max exemption limit in Infra bonds is 20,000 so there is no point investing 25,000 in that as you did last year.
Hi Pankaj,
I am new to Mutual fund invetsment. This year i want to invest around 50k in MF for tax savings. Can you suggets me which MF i need to invest. I am looking for good returns in 5 years. Else is investing in NSC better for returns in 6 yrs? Please advice.
Thanks,
Shilpa
@Shilpa
Returns from tax saving mutual funds are not fixed. It may have pretty good returns or even may have negative returns.
If you wish to invest in tax saving mutual funds, you can invest into Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver or Fidelity Tax Advantage.
If you want fixed return, then tax saving fixed deposit of five years would be better choice. You will get around 9-9.5 p.a. rate of interest at this point.
Hi Pankaj,
I am new to Mutual fund invetsment. This year i want to invest around 50k – 60k in MF for tax savings. Can you suggets me which MF i need to invest.
Since for this i cant do SIP, i’m planning to go with single time investment. Is it good option? Please guide.
Thanks,
Deepu
@Deepu
You can choose among: Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage
Still there are six months left in current financial year, you can start a SIP for 6 months. Or you can yourself invest 10,000 for next 6 months.
Thank you Pankaj!!
Very Best
Nagarajan
Hi Pankaj,
According to your advice,If i invest into Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver or Fidelity Tax Advantage for 5years.Is rate of interest taxable.?
@Biswajit
Long term gains (earned from equity based investments which are kept for atleast more than a year) are non taxable.
So there would not be any income tax on gains from tax saver mutual funds as they already have three year’s lock-in.
Hello Sir,
First of all thanks for your such a great assistance to an open forum.
I am really impressed of your views and like to know your views regarding following portfolio.
Please recommend if I need to back off from any of these and to dip into any other fund of different company
DSP Blackrock top 100 – 2000pm
DSP Blackrock Equity – 2000pm
DSP Blackrock Microcap – 2000pm
DSP Taxsaver Fund – 2000pm
Please advice.
Siddharth
@Siddharth
All funds selected by you are good.
However, you may considering replacing DSPBR Microcap with IDFC Premier Equity, ICICI Pru discovery Inst I or Birla sunlife Dividend yield plus.
Hi Pankaj,
I am Neha and new to savings. Can you advise me is SIP in better than a mutual fund. I want to invest 8 to 10K a month for 2 to 3 years. I would want to save tax as well. Kindly suggest a few options.
@Neha
SIP is mode of investment in Mutual funds, where rather than investing lump-sum amount, an amount is invested every month for a longer period (minimum 6 months).
SIP investment is better than lump-sum investment as it averages out cost of buying and therefore is less risky than lump-sum.
Tax saving mutual funds will only be available for this financial year (Till March 2012) as after that due to Direct tax code, there won’t be any 80-C deduction on mutual fund investment.
For this year, you can invest into Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver or Fidelity Tax Advantage.
Hi Pankaj,
Does this means if I invest in Mutual Fund next year, I cannot show it for tax saving.
Please advice.
Thanks,
Shilpa
@Shilpa
If you invest in mutual funds after 31st March, 2012, there won’t be any tax deduction available for them.
Hi Pankaj,
I am currently investing in One SIP i.e HDFC tope 200 @ 3000 Rs permonth, i would like to open two more SIP’s for 3000 each. Please suggest to me accordingly.
Rgd,
Shashaank
@Shashaank
Mutual funds selection depends on one’s need and risk appetite.
Please go through following posts:
http://www.socialfinance.in/questions/911/pgolla-need-best-suitable-mutual-funds-to-invest-large-amounts
http://www.socialfinance.in/questions/1607/mutual-fund-investment-and-sip
It will surely help you in finding right fund.
Adding to the above query, i have shortlisted some fund :-
HDFC midcap oppertunity fund
Sunadaram select midcap
Franklin India index fund
Birla sun life frontline
DSP black Rock top 100 equity
Franklin india blue chip
my goal is to make a total of 5 SIP for 3000 rs each every month for a period of 15 years. How much can i expect at maturity.
Hi Pankaj,
Can you please suggest me which is the best Mutual fund (ULIP or ELSS) which will give relatively maximum returns and also it should serve the purpose of tax saving ?
I came across the following fund- “Canara Robeco Equity Tax Saver Fund – Growth”
Basically I’m looking for tax saving and it should give me good returns.
Thanks in Advance.
With Best Regards,
Nagesh
@Nagesh
Canara Robeco is a good fund and you can invest in it for tax saving.
Pankaj,
Thank you very much for the reply.
Will it be valid investment once DTC comes into picture. Can you please let me know.
If it is invalid can you please let me know which is the best for investment and tax saving ?
Thanks in Advance,
Regards,
Nagesh
@Nagesh
Tax saving mutual funds will be available for tax benefits only this financial year (till march 2012). After that Direct tax code will come into force in which many of the tax saving avenues have been removed.
Best option for investment for tax saving after direct tax code will be New pension scheme and PPF. Also if you have not taken, consider buying a term insurance.
Hi Pankaj,
Can you suggest me the best mutual fund for tax saver with high return.
@Sumit
You can choose among Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Returns are not guaranteed and past performance may not be repeated in future.
Hi Pankaj,
Can you pls. tell me how I invest in Mutual fund (i.e. what are the steps to be followed).
@Sumit
Please read answer to a similar query on following page: http://www.socialfinance.in/questions/1786/how-to-open-a-systematic-investment-plan
Hi
I have around 1lac that i would like to make a one time investment of
I know this is only a thread on mutual funds but if you could advise how to plan this investment spread over efts ormutual funds or fixed deposits or PPF as options
Also I have invested alread 2000 rs each in HDFC top 200 and Fidelity Equity Are these tax saving funds?
@Ronette
You can invest amount based on your needs.
If you need this amount back within next 1-2 years, you can invest into fixed deposits or fixed maturity plan (FMP) mutal funds.
If you want to invest for long term, you can invest into liquid/debt mutual fund and start a systematic transfer plan (STP) to equity based mutual funds.
HDFC Top 200 and Fidelity equity are not tax saving mutual funds.
Hi Pankaj,
Its good to see your support for all these Issues. I would like to know about ELSS and any good way to invest 25 to 30 k in Mutuals Funds, with the idea of tax saving. Detalis about perticular plans as well. Thanks, Yamini
@Yamini
You may choose to invest among mutual funds like Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Hi Pankaj,
Thanks for the advice,i am little concern about returnslike suppose i m investing 30000 in 3 years than what is the benifit i m getting after 3 years, any other options then mutual funds which will give some good returns plus tax savings will also work, so hoping for other suggestions are welcome, Thanks once again and in advance, Yamini
@Yamini
Returns in mutual funds are not fixed. These are riskier in nature and may give very good or very bad returns.
If you are concerned about fixed returns, I would advise you to invest into tax saving fixed deposits for five years. At this time, bank are offering around 9.5% rate of interest on such investments. But one thing to note that, interest on these are also taxable and TDS would be deducted by bank.