What we think of SBI Magum Tax Gain and what to do when your ELSS underperforms.
Edited Highlights
0:25 FastTrack wants our opinion about his investment in SBI Magnum Tax Gain
1:19 FastTrack wants to know whether his investment in SBI Magnum Tax Gain was fine
1:27 FastTrack also wants to know what happens if there is some impact on the principal amount since this is a market--linked investment
1:40 We think that the investment is fine. It is one of the oldest ELSS
1:51 But being a market linked scheme, the past is never a good indicator of future performance
1:59 There have been cases in the past where people have bought ELSS due to their performance track record only to be disappointed during the 3 year lock in period
2:23 You can't do much in the 3 year lock in period of the ELSS
2: 31 After the 3 year lock in period, check why the scheme hasn't done well. Compare performance with benchmarks and peers
2:40 Find out if equity funds in general haven't done well,
2:55 If you are very dissatisfied with the performance, move your money from the ELSS to a consistently performing equity fund scheme
3:04 Remember, in an SIP in ELSS there is a 3 year lock in for each instalment of investment
3:32 The key thing is to stay invested in equity funds
3:36 Over a long period of time 90% of the returns in determined by asset allocation or the asset classes in which you invest i.e. equity, debt and others
4:19 Even if your ELSS doesn't do well, you can always move to consistently performing equity funds
4:28 Remember, you need 8-10 years or more in an equity investment
4:43 The average return of equities can also be a great return and be much better than that from debt
