Ask Value Research

Should I invest in an ELSS with high AUM?

Dhirendra Kumar tells if you should invest in a tax-saving fund with high AUM

Is it fine to invest in a tax-saving fund with high AUM?
-Pratham

Yes. The well diversified tax-saving funds are fine, even with very high AUM. But there are tax-saving funds which are reasonably focused or have derived their performance with smallcaps and midcaps. In such cases, as they turn big, they may not be as good as they have been.

So, continue with a tax-saving fund with high AUM if it is well diversified. But, the ones which are focused on smallcaps and midcaps, may not be good enough as they turn big.

This article was originally published on October 30, 2018.

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