In our weekly mutual fund Q&A, we answer a viewer query on whether one should have more than one ELSS. FundooMoney website: www.fundoomoney.com
Edited Highlights
1:26 Mamta Pai asks whether you need to have more than one ELSS (Equity Linked Savings Scheme)
2:32 We at FundooMoney, don't think that you need to have more than one ELSS
2:39 Equity Linked Savings Scheme is basically an equity fund that also gives you a tax saving facility
2:49 There are too many major differences in the nature of equity linked savings schemes
3:24 Avoid the common mistake of buying a new ELSS every year, which is also the last year's outperformer
3:33 Over a long period of time people end picking up schemes which are basically doing the same thing
3:52 You need to carefully invest in ELSS since they have a 3-year lock-in period
4:07 Among the differentiating factors for ELSS are consistency of performance over different time periods, pedigree, time period of existence and size of the fund
4:41 Other equity fund categories have different themes and focus like mid-cap, large-cap and themes like economic growth besides focussing on certain sectors
5:13 Before, you invest in an ELSS, find out how much tax saving investment you need to make
6:18 When your ELSS underperforms consistently, wait for the lock-in period to get over. Then, invest in consistently performing funds from other equity fund categories
6:34 Remember, studies have showed 90% of long term returns from investments are determined by asset classes you have invested in
