Ask Value Research

Should one invest in ELSS funds even if tax saving is not an objective?

"Never build constraints for yourself unnecessarily," says Dhirendra Kumar

Answer transcript: There's only one difference with another multicap equity fund - your money is locked in for three years. The side effect of this is that the fund manager will be able to think long term because he will be won't be under severe redemption pressure in bad weather. But it has not translated into any statistical evidence that tax saving funds do better than normal mutual funds. There is a possibility that when tax savings funds get a lot of money and investors cannot get out, the fund manager can get complacent.

This article was originally published on May 18, 2017.


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