ELSS Funds – Comparison

POSTED BY Rohit Majumdar ON June 14, 2012 3:43 pm COMMENTS (6)

Shortlisted 2 ELSS funds to invest Rs 2000/- per month –
1. HDFC Tax Saver
2. Canara Robeco Equity Tax saver

Need to finalize 1 of them; there are some pros and cons for both of them..

Can. Robeco has a substantially high expense ratio of 2.32 (HDFC is 1.85) which would definitely have a negative compounding effect over the long term.
On the other hand, 5 yr SIP returns are higher for Can. Robeco (11.74%).
Not sure how much the higher returns could offset the higher expense ratio. Also, returns could anyways change with change in market conditions.

Not sure about the management style of both the fund managers.

Any thoughts/advice?

6 replies on this article “ELSS Funds – Comparison”

  1. rajmehta373 says:

    When it comes to comparing objectives, the most important thing that you will need to look into is that whether you would want to invest your money in an equity fund or in a debt instrument. A higher expense ratio is not the only factor that impacts net returns. Other factors that can have an impact include you own behavior and when you have made the investment.

    1. Thanks for your comment Raj

  2. Rohit Majumdar says:

    Okay, I want to invest 20,000/-. Any thoughts now?
    Point is, does it matter how much the amt. is. I’m looking for an objective comparison since I don’t have much experience.

    I’m sure a higher expense ratio will have an impact on net returns. Wanted to discuss with the forum.

    Btw, I am starting with the ELSS fund as the first step towards investing. So don’t have a portfolio to speak of yet.

    Cheers.

    1. Dear Rohit, for the consistency of the return, please go with HDFC Tax saver.

      thanks

      Ashal

    2. Ramesh says:

      Whether you invest 2k or 20k or 2 lakhs, it does not matter.

      Regarding objective comparison, the most important point remains whether you want to put your money in an equity instrument or a debt instrument (discussion is related to tax-saving instruments).

      A higher expense ratio is not the only thing which impacts the net returns. Others things which are more important are your own behavior and when you have made the purchase. If you will ask me, you should go with Quantum Tax Saving Fund (growth option) which has the least expense ratio (1.25%), and that is an AMC with the best interests of the investor.

      Do not go by star ratings of funds (which is mostly mis-sense). Your present 5 star fund will become a 3 star one after 2 years, while a non-star or 3 star fund will become 5 star after that period. (I will still like to know, how you have come to the conclusion of these 2 funds).

      A portfolio = equity + debt (RD+FD+cash) + investment-insurance policies+real estate.
      Keep learning and investing.
      Ramesh

  3. Ramesh says:

    How much is the ELSS part of your total portfolio?

    2k per month x 10 (only 10 months remaining in this FY) = 20k.

    Is is that substantial that you are mulling over so much detail?

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