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Go beyond tax-saving with ELSS funds

After the lock-in period, ELSS schemes can play the role of diversified equity funds in your portfolio

I have about five tax saving funds in my portfolio since six years. There three-year lock-in period is over. Should I get out of these funds and invest in regular diversified funds? Are they also as actively managed as regular equity funds?
-Sanjeev

For you, a tax saving fund which is out of the lock-in period is a normal equity fund. These funds are as actively managed as any other open-ended fund because a fund company has to show performance on a continuous basis.

A fund manager of a closed-end fund may lose interest because once he gets the money, he has no incentive to manage it. But in case of tax saving funds, his fund should always look attractive because its always open to new investors.

If any of your existing investment is not doing well, you can get out of those funds in a methodical way.



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