I have invested Rs 80,000 in SBI Magnum Tax Gain and around Rs 40,000 in HDFC Long Term Advantage Fund. My parents and my wife have also invested significantly in SBI Magnum Tax Gain. Is our exposure heavy towards the SBI tax saving fund? Should our investment, as a family, be diversified across various funds? If yes, which other tax saving funds can we choose?
-Sameer
If you consider your family's portfolio as one, then you are right. Over exposure to a single fund is certainly not advisable. No doubt SBI Magnum Tax Gain has done exceedingly well, but it could not match up to its peers in 2007. So it is always better to diversify your portfolio among three to four tax saving funds (if the amount invested is high). You can choose some other well rated tax saving funds like Sundaram BNP Paribas Tax Saver, Birla Sun Life Tax Relief 96, HDFC Tax Saver and Principal Tax Savings.
This article was originally published on February 29, 2008.
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