Ask ET Mutual Funds: Could you suggest some good ELSS funds?
If you have any mutual fund queries, message ET Mutual Funds on Facebook . We will get it answered by our panel of experts.
By ET Online |
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I am currently investing Rs 3,000 through an SIP in Sundaram Select Midcap Fund (tenure: 15 years). Also, Rs 3,080 per month for 16 years in LIC premium. I want to invest Rs 3,000 more in tax-saving mutual fund schemes. Could you please suggest me some good ELSS funds?
- Chirag Mehta
Vivekh Pathak, Founder, FiannceandYou, responds:
Since you are already invested in a Sundaram Select Midcap Fund which is a relatively volatile fund, opt for a less-volatile fund with a higher risk-adjusted return per unit of risk. Consider investing in DSP Black Rock Tax Saver Fund. This will balance the overall portfolio in terms of volatility and will provide higher returns.
DSP BlackRock Tax Saver remains in the top quartile since the last 5 years among the ELSS funds. It has a higher sharpe ratio (risk-adjusted performance), providing higher returns with lower investment risk undertaken (less volatile). It has a higher risk- adjusted return as compared to its peers and has provided higher returns per unit of risk undertaken. Although, the funds' own returns are a little more volatile than its peers - that is, its standard deviation is high. However, it has taken lesser investment risks to provide higher returns.
You can also invest in Birla Sun Life Tax Relief 96, Axis Long-term Equity Fund- G and Reliance Tax Saver Fund-G in the mentioned order of their overall ranking. Reliance Tax Saver Fund is a consistent performer over the years. However, it is a little more volatile as compared to its peers, so unless you can assume more risk-reward relationship, stay away from Reliance Tax Saver.
(If you have any mutual fund queries, message ET Mutual Funds on Facebook . We will get it answered by our panel of experts.)
- Chirag Mehta
Vivekh Pathak, Founder, FiannceandYou, responds:
Since you are already invested in a Sundaram Select Midcap Fund which is a relatively volatile fund, opt for a less-volatile fund with a higher risk-adjusted return per unit of risk. Consider investing in DSP Black Rock Tax Saver Fund. This will balance the overall portfolio in terms of volatility and will provide higher returns.
DSP BlackRock Tax Saver remains in the top quartile since the last 5 years among the ELSS funds. It has a higher sharpe ratio (risk-adjusted performance), providing higher returns with lower investment risk undertaken (less volatile). It has a higher risk- adjusted return as compared to its peers and has provided higher returns per unit of risk undertaken. Although, the funds' own returns are a little more volatile than its peers - that is, its standard deviation is high. However, it has taken lesser investment risks to provide higher returns.
You can also invest in Birla Sun Life Tax Relief 96, Axis Long-term Equity Fund- G and Reliance Tax Saver Fund-G in the mentioned order of their overall ranking. Reliance Tax Saver Fund is a consistent performer over the years. However, it is a little more volatile as compared to its peers, so unless you can assume more risk-reward relationship, stay away from Reliance Tax Saver.
(If you have any mutual fund queries, message ET Mutual Funds on Facebook . We will get it answered by our panel of experts.)
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