Whats your view on these ELSS Mutual Funds ?

POSTED BY SANDEEP JAIN ON January 2, 2014 10:51 am COMMENTS (11)

Hi Jago investor team,

I have invested the below ELSS MF in the year 2007- 2008. Since they were purchased without much knowledge on the product and invested purely based on the investment made by other friends and just to save tax.

Mutual fund  Purchased on  Invested amount  Units  Current Value 
BIRLA SL TAX RELIEF 96 (D) 28-01-08 10000 70.552 6072
HDFC TAX SAVER (G) 29-01-08 10000 54.706 14027
Principal Personal Tax Saver  29-01-08 11000 59.34 6183
Principal Tax Savings  29-01-08 10000 87.078 8018
SBI Magnum Tax Gain (G) 29-01-08 20000 283.888 20374
Sundaram Tax Saver (G) 29-01-08 10000 244.663 11905
Total  71000   66579

Now when I am checking my portfolio, I am eager to withdraw my amount from these ELSS and want to pay the amount of almost 70000/- in paying the EMI of Housing Loan.

Would like to know your suggestions whether to continue the above MF or withdraw amount from ELSS.

Kindly revert for your suggestions.

Regards,

Sandeep  Jain

 

11 replies on this article “Whats your view on these ELSS Mutual Funds ?”

  1. SANDEEP JAIN says:

    Hi Ashal,

    Thanks for your example. Yes, now it gave me the correct understanding on how it works.

    Regard,
    Sandeep

  2. ashalanshu says:

    Dear Sandeep, Let’s assume your fund’s NAV is 20 Rs. and it declares 2 Rs. deividend. So post dividend the value of your unit ‘ll be 18 Rs. and 2 Rs. as dividend is already in your pocket that’s making it 18+2 = 20 Rs. the original NAV for your Units.

    So how does it matter that you are redeeming before dividend or after dividend?

    Thanks

    Ashal

  3. SANDEEP JAIN says:

    Hi Ashal,

    Thanks for your quick reply, As i said i m very poor at these concepts and ivnested purely with out much awareness.

    It really helpful, if you can share a small and simple example.

    Thanks for your help as usual.

    Kindly revert.

    Regards,
    Sandeep

  4. ashalanshu says:

    Dear Sandeep, post dividend declaration, the NAV ‘ll fall to adjust dividend amount from corpus. So how ‘ll you get the benefit if any, you have in your mind?

    Thanks

    Ashal

  5. SANDEEP JAIN says:

    Hello Friends,

    Just a small query, i have BIRLA SL TAX RELIEF 96 (D),which normally gives dividend in the month of March every year, so shall i wait to redemp this MF (because of Dividend) and rest all i m planning to redempt in the current month itself.

    Just need your advice.

    Regards,
    Sandeep

  6. ashalanshu says:

    Dear Rahul, in case of loans, it’s more about emotional aspect rather than financial one. Instead of forcing on financial thing, I w’d let the person to be in comfort on emotional part as partial loan amount has been paid back.

    Thanks

    Ashal

    1. SANDEEP JAIN says:

      Hi Ashal/ Rahul,

      Thanks for your suggestions. It really helps me to take the decision on my investment.

      Regards,
      Sandeep

  7. rahul123 says:

    Hi Ashal,

    This is another example why people who have liabilities (and are salaried) should avoid capital market.

    Hi Sandeep,

    Couple of years back i was also in same dilemma. The best option is to prepay. Reasons are as below-

    1. For home loan you have to pay interest around 10%
    2. There is no guarantee of returns in MF.

    You should not think about stock market till you reduce the outstanding loan amount significantly. Observe the market carefully (assume as if you have invested), get knowledge and after few years, you can again think of investing in market.

    Thanks,
    Rahul

  8. ashalanshu says:

    Dear Sandep, if the idea is to repay principal amount of loan, please redeem all and repay.

    thanks

    Ashal

  9. ashalanshu says:

    Dear Sandeep, why are you not paying your EMI from regular income?

    thanks

    Ashal

    1. SANDEEP JAIN says:

      Hi Ashal,

      Thanks for your prompt reply. Currently i m paying my EMI from regular incomes only, but looking after the income/ Surplus generated from MF of ELSS category, i would like to go for paying my Principal amount of Loan rather than keep invested. Atleast it will reduce my either period/ EMI’s in future.

      This because if you compare the current value of my investment with other peer they are nowhere compareable i mean returns are very very poor.

      Please suggest, whether i am on the right track.

      Regards,
      Sandeep

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