Which ELSS is best for a first time mutual fund investor ?

POSTED BY Praveen S ON June 20, 2012 11:26 am COMMENTS (2)

Hi ,
Before I begin , A big thank you to Jagoinvestor for pulling me in to the world of investment and cautioning me about various traps . Kudos.
I am 23 and just beginning to invest . I have shortlisted 5 ELSS funds to invest Rs.1,00,000 .My investment aim is to get a 12-14 % annualized return after three years . I am young and I can take a few risks .
The five funds in the order of priority are
1. Canara robeco Tax saver(G)
2. ICICI Prudential tax saver(G)
3. Quantum Tax saver(G)
4. Reliance tax saver(G)
5.Franklin templetom tax saver (G)
I want to invest 50,000 in two of these funds . My major area for choosing these funds has been their sector allocation . I am still in the dark as to what would be the right method to invest (Fundsindia /Demat account /AMC ) . Also what\’s the best method to reap benefits ,SIP or Bulk buy ?
I am a bit concerned about the high charges from a few AMC s for these funds . Also does it make any difference that quantum fund has very small amount invested , should it influence my investment decision in any way ?
Thanks in advance

2 replies on this article “Which ELSS is best for a first time mutual fund investor ?”

  1. Dear Praveen, Please stop giving us any credit. Please do not thank us. Reason –

    You are not a Jagoinvestor yet. You are still a sleepy investor. Why I’m saying so?

    You are just at the start & right now instead of doing simple things – PF, PPF, ELSS of your choice, you are doing complex things – sector allocation, theme allocation, AMC/fund size, high return from Eq. for 2-3Y time duration…….

    It’s very easy to say- I’m young I can take risk but there is a lot of difference between words & actual action.

    Please do simple things.

    Thanks

    Ashal

  2. Ramesh says:

    Your return expectation is unrealistic in such a short time frame. It can happen that your money gets doubled in 2 years, and fall to half (so net return 0%) in the 3 rd year. That is the way, equities behave.

    Sector allocation is good on paper, but remember that sector allocation will not stay that way for the whole 3 years or whatever time frame you will stay.

    Quantum and Franklin Tax savers are very decent conservative funds. You can go with the respective AMCs too in both these funds. There is no actual benefit in going through demat.

    SIP/ Bulk: Depends upon the availability of money with you. If you have 1 lakh today in your hand. Go and buy in bulk.

    If you have regular income over a period of time, invest accordingly. There is no statistical difference in the amount of future return in either case.

    Quantum’s less corpus is basically because they do not pay any distributor fees, which is passed to you in the form of lowest FMC. So, it is an investor friendly fund house. But there management is top-notch.

    Ramesh

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