
If a 3-year lock-in period is acceptable, how would the returns of a tax-saving fund compare to those of regular equity funds?
-Ramesh
Ordinarily, we expect tax-saving funds to give better returns because the fund manager doesn't have to worry about the money getting redeemed on a daily basis. When a fund manager has an amount to invest for 3 years, he can assume higher risks and invest for the long-term. However, we haven't seen any statistic that can say that a tax-saving fund is better than a regular open-end equity fund.