I was investing in 4 ELSS funds BSL Tax Relief 96, DSPBR Tax Saver, Principal Personal Tax Saver and Sundaram Tax Saver for the last three years and last month the lock-in period got over. The absolute return on the investment is 25 per cent currently. Should I continue to invest any of them or redeem?
- Avik Sinha Roy
Just the way a lot of thought goes at the time of investing in a mutual fund, a lot of thought goes when exiting a fund. The funds having completed the three year lock-in should not be the sole reason to exit from them. Ask yourself if you need the money from redemption? If you do need the money or have zeroed on where to invest it, you should exit these investments and invest in better opportunities. Another possibility if you have plan to claim for tax deductions on investments from ELSS; you can redeem and re-invest the sums better performing funds in this category such as Fidelity Tax Advantage or Canara Robeco Equity Tax Saver instead because investing in four different equity linked savings scheme at the same time is diversification in number and not style. In future you should consider investing in one or at best two consistently well performing funds from this category than so many.
This article was originally published on September 13, 2011.
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