Ask ET Mutual Funds: Is it right to invest a lumpsum in an ELSS?

I have a monthly SIP of Rs 5,000 in SBI Bluechip Fund (Regular, growth) and in DSP BlackRock Small and Mid Cap Fund (Regular, growth). I want to invest for a long term, five to seven years. Have I chosen the right funds? Also, I have invested a lumpsum of Rs 50,000 each in Axis Long Term Equity Fund and Reliance Tax Saver (ELSS) Fund for tax-saving purpose. Is it right to invest a lumpsum in ELSS? Please guide.

--Kirankumar Jain

Chokkalingam Palaniappan, Director, Prakala Wealth Management, responds:

For your SIP investments, you have chosen one fund in the largecap category and another one in the small and midcap category, which is absolutely fine for the period that you have chosen. DSP BlackRock Small & Midcap Fund is doing well and hence you can continue investing in the scheme. SBI Bluechip is also a good fund except that on a comparative basis it is a little bit slow. If you would like to go with a little higher return, you may think of Kotak Select Focus Fund in place of SBI Bluechip Fund.

Instead of bulk, it is always good to invest through SIP mode as it will average out. Hence, going forward ,think of starting an SIP in a good ELSS fund such as DSP-BR Tax Saver or Principal Tax Savings Fund. Nothing wrong in investing a lumpsum in ELSS. However, timing may not work out always. Moreover SIP brings discipline in investing.

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