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I started investing in DSP BlackRock Tax Saver and Axis Long Term Equity around one year back. Since DSP Tax saver is not performing well, I have discontinued my SIP in it. Is my selection right? Also, please suggest two multicap funds.
-Hemant Patel
First of all, most of the tax-saving funds are multicap funds. And second, you should not change your investment only on the basis of the performance over such a short time period. Axis Long Term Equity focuses on a high quality portfolio. Basically, on companies which have high profits and visible earnings. In a tax-saving fund, your money gets locked-in for three years. In such a scenario, I feel you should take a little bit of risk.
It will be very difficult if you will change your strategy every three months on the basis of numbers. Because, then you will keep redeeming from funds which hasn't done well and investing in funds which has done well. It is not possible for any fund to continuously perform well.
In my opinion, both these funds are good for tax-saving. And I am hopeful that once the market cycle ends, DSP Tax saver will be able to give good returns. You can consider Mirae Asset India Equity and Motilal Oswal Multicap 35 for multicap funds. I personally like Motilal Oswal Multicap 35 despite the weak performance in the past few months. It is a good multicap fund. Also, ICICI Pru Value Discovery which has been moved to Value Category is also a promising fund. Other promising funds in multicap category are Kotak Standard Multicap and SBI Magnum Multicap.
This article was originally published on August 01, 2018.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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