Ask ET Mutual Funds: Which ELSS should I pick to invest for 15 years?

I am investing through SIPs since the past six months. I invest Rs 2,000 in Birla sun Life Banking and Financial Services Fund and Rs 3,000 in DSP BlackRock Micro Cap Fund. From April onwards I am planning to add Rs 6,000 per month in SIP to save taxes under section 80C. Hence, I have decided to put Rs 2,000 each in DSP Blackrock Tax Saver Fund, Axis Long Term Equity Fund and Reliance Tax Saver(ELSS) Fund. My investment horizon is 15 years. Is my allocation right or should I change it? Have I selected the right ELSS funds?

-- Vigneshraja Venkatapathy

Abhay Shaha, Certified Financial Planner, responds:


For your existing Investments, I believe Banking Sector will continue to outperform. I believe you can consider switching your SIP from Birla Sun Life Baking and Financial Services Fund to ICICI Prudential Banking and Financial Services Fund. It has been the best performer in the past couple of years, (60.15 per cent returns in the last year, compared to Birla’s return of 47.64 per cent). In the past last three years, the CAGR of ICICI is 28.68 per cent, compared to Birla’s 27.37 per cent.

I advise you to continue with your investments in DSP BalckRock Micro Cap Fund. It is a good fund with a good diversified portfolio in small cap companies. For your new Investments, I will instead suggest to go for only two funds: DSP Tax Saver and Reliance Tax Saver.


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