I hold Sundaram Tax Saver mutual fund. Since the last 2-3 months, I see that the market value of my investment is low. Is the fund not performing well?
- Umesh Deshpande
You are right, but don't be overly concerned about it. Such short-term movements should not cause you any apprehension. Performance of a scheme can be hit due to cash calls, exposure to a certain market cap, stock picks which did not work out or sector exposures which have not played out. Good funds, like good players, have their bad patches. HDFC Taxsaver, a 4-star rated fund in the same category, hit a lean patch in 2007 and found itself at the bottom of its category. However, it has bounced back to a top-quartile performance. Hence, one must look at how the fund performs over longer periods of time.
Sundaram BNP Paribas Taxsaver is one of the better options in its category. Yes, the fund has faltered in recent times, but its long-term performance holds it in good stead. And even if you are unhappy, you have to hold your investment for the mandatory three years in an Equity Linked Savings Scheme (ELSS).
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This article was originally published on July 15, 2010.
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