Advice for Investment in ELSS and Small Cap Mutual Funds

POSTED BY 91188ritesh@gmail.com ON June 18, 2014 5:28 pm COMMENTS (7)

Hello Friends,

I am Ritesh from Gujarat and 25 yrs old. My current investments are:

1) PPF – 10,000/- p.a lump sum.

2) Quantum Long Term Equity Fund- 500/- SIP

I want to increase my investment now to Rs.2000 per month. I am thinking some ELSS fund because of its tax free benefit(80-C and interest tax free).

My investment break out will be as below:

1) Quantum Long Term Equity Fund- 500/- SIP

2) some ELSS- 1000/- SIP

3) some Small-Mid cap MF –  500/- SIP

Please suggest me some best ELSS and small cap MF.  I have another question is if i should i wait for budget(this July) to come for investment. Any advice would be helpful.

Regards,

Ritesh P.

7 replies on this article “Advice for Investment in ELSS and Small Cap Mutual Funds”

  1. 91188ritesh@gmail.com says:

    Dear Friends ..Thanks for reply.

    I have another concern regarding Direct Tax Code(DTC) on ELSS.
    I am not sure if DTC applied or not.
    It seems ELSS will lose its tax benefit feature once DTC will be applied.

    Source :- http://www.moneycontrol.com/news/mf-experts/dtc-effectselss-funds_776248.html

    http://www.valueresearchonline.com/story/h2_storyView.asp?str=21087

    what are your thoughts on it ??

    Thanks,
    Ritesh P.

    1. Hemanth Chandra says:

      I think that article was an old article and says if DTC comes into action…. I think DTC has not come into picture yet….. So, no problem to ELSS as on today I think….

  2. Viren Phansalkar says:

    IMHO, tax saving should be the cherry on the cake and not the cake itself.
    Try going other way. First decide the AMC, cap of the fund, sectors to look out for, etc.. Then check if the selected AMC has tax saving plan in the selection criteria.

    Example: I wish to invest in XYZ AMC and would like to go for large cap. Now check if XYZ has tax saving fund which invests in large cap.

    1. 91188ritesh@gmail.com says:

      Dear Viren,

      Thanks for reply.

      Regards,
      Ritesh

  3. Hemanth Chandra says:

    Dear Ritesh,

    Relaince Tax Saver, Axis Long Term Equity Fund, Franklin Tax Shield are some of the good ELSS funds right now if you see the return wise. You can choose on from these.
    You can check the ELSS list in below link
    http://www.valueresearchonline.com/funds/fundSelector/default.asp?exc=susp%2Cdir%2Cclose&cat=18

    Also, do remember that ELSS have a lockin period of 3 years from the date of investment.

    On which date of the year are you investing the 10k lumpsum amount in PPF??

    For, Small-Mid cap, u can check PPFAS. I like the investment methodology of them. amc.ppfas.com

    You can start now, no need to wait till budget is my personal opinion.

    PS : I am not an agent of any AMCs mentioned above.

    1. 91188ritesh@gmail.com says:

      Dear Hemanth,

      Thanks for reply.

      I have invested 10k in PPF on 10th of this June. I prefer to invest 10k in FY.
      I have already invested 20k so far in PPF.

      Thanks,
      Ritesh

      1. Hemanth Chandra says:

        Invest before 5th of a month in PPF to get better returns.

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