I invest Rs 1,000/month in each of these ELSS - Religare Tax Plan, HDFC Top 200, HDFC Tax Saver and ICICI Prudential Tax Plan. Should I continue or redeem and put it in another fund?
I have Rs 3,000 to invest in SIPs. Should I distribute it between two or three funds?
I need to put in some money for around three months, is HDFC Top 200 a good choice?
- Neha Parmar
There are a number of issues you have brought up, let's take them one at a time.
Let's talk about your tax saving funds first. If you are investing Rs 4,000/month an Equity Linked Savings Schemes (ELSS), why are you going with four funds? That too, two schemes from the same fund house (HDFC Mutual Fund). You could have distributed your investment between just two funds, if you were reluctant to go with just one.
You want to know if you should redeem your units and put it in another fund. You must realise that investments in tax savings funds have a 3-year lock-in period. So you have no option but to stay put.
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You ask if HDFC Top 200 is a good choice for around three months. Certainly not! For such a short time frame, you cannot consider any equity product. Equity must have a time frame of at least three years.
Since you already have four ELSS, don't go overboard with other equity diversified funds. Stick to either one or two. If you go with one fund, pick it from the Large & Mid Cap category. If you go with two, opt for one from the Large Cap category and the other from the Mid Cap category.
This article was originally published on October 21, 2010.
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