Saturday, July 19, 2008

Invest in ELSS or Diversified Equity Fund?

My age is 33. i have tax liability near about 1 lakh. which scheme is best suite in my profile? ELSS or Eqt Div. ? pls suggest. Prev fin year I have invested 20,000/- in DSP ML tax saver G . Is fund is Ok?
Thanks, Sugata.

Srikanth's reply :

Dear Sugata,
Upto your tax liability you better invest in ELSS, whatever extra you are capable of investing, you should consider investing in Diversified Equity Funds.
Do not invest any amount over and above the treshold of 1 lakh in ELSS because in ELSS you will be stuck with the fund for 3 years, and will be not be able to switch out in case of a critical change in the performance of the fund.
With age on your side, you can safely consider investing in Diversified Equity Funds. Some of them could be
Birla Sunlife Equity Fund
DSPML Top 100 Fund
DSPML World Gold Fund
Templeton Equity India Income Fund
HDFC Prudence Fund
HDFC Top 200 Fund
Reliance Growth Fund
Reliance Vision fund
Sundaram Rural India Fund
DWS Alpha Fund.

Regarding your investing in DSPML Tax Saver Fund, its performance has been good in its relatively short history. If you want to invest some more amount in ELSS, you can consider
DWS Tax SAving fund
Birla Sunlife Tax Relief 96
HDFC Tax Saver
Lotus India Tax Plan
Principal Personal Tax Saver
Sundaram Tax Saver
Preferably invest through systematic Investment Plan and avoid Lumpsum Investing.
Best of luck.
Srikanth Shankar Matrubai

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