Reality Low or high Net Asset Value (NAV) has nothing to do with the scheme’s performance since it is based on percentage terms. If two funds with different NAVs give you 15 per cent return, in both the cases, your portfolio will go up by 15 per cent. The NAVs will grow in the same proportion.
Myth Imminent dividend declaration will add to gains
Reality In reality, a scheme’s NAV falls by the same proportion as the dividend distributed. A consistently outperforming fund may not declare dividends soon but may do so in the future. It may handsomely reward you in the long-run with its performance.
Myth Recent outperformers are “safe bets”
Reality Many people buy last year’s outperformer funds. However, the conditions that made the fund an outperformer may cease to exist subsequently. Check out performances over three and five year periods too.
Myth ELSS is too complex
Reality ELSS is just like any other equity mutual fund scheme except that it has a three year lock-in period. You can begin investing with an amount as small as Rs 500.
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