Tax Saving ELSS Mutual Fund SIP Query

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Supra

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I was thinking to start a SIP on a ELSS Mutual Fund. I had zeroed on the following 2-3 options to split a total of 10k per mnth into 2-3 SIPs on different days of the month.

1. Canara Robeco Tax Saver (Mid-Cap)
2. SBI Magnum Tax Gain (Large - Cap)
3. Fidelity Tax Advantage/HDFC Tax Saver. (Large-Mid Cap)

Thinking of putting 2 of them in Growth Mode and 1 in Dividend Mode.

Please suggest if it looks fine or may be a better strategy I can opt for ELSS MFs for a horizon of at least 3-4 years.

Also about buying them I was thinking of doing it via FundsIndia - Mutual funds and more... as it will be easier to collate and monitor the investments from a single POC. Also they are totally free unlike brokerage houses which charge a monthly/quarterly fee. I have an Indiabulls account and that doesn't seem to have an online facility to subscribe to MFs. Or should I directly approach the MF houses web-site (Canara Robeco doesn't have one )

Plz pout in your ideas and suggestions :hap2:
 
I don't know about the rest much, but I have invested in SBI Magnum Tax Gain for quite a time and I am still investing in it. I have seen that it's performace has really gone down. I might also stop investing in it in the near future.

You should check moneycontrol.com and head to the mutual funds section.
 
Fund 1: Good enough, invested in since last 1 year now through SIP, 5 star rated by value research.

Fund 2 Did the terrible mistake of lump sum investing in first week of Jan, 08 (when market touched 21k), recent performance has been bad, the fund has not been able to recover from the crash. 3 star rated now. I doubt I will recover my money even after three year cap.

Fund 3 Started SIP in HDFC Taxsaver last month, good enough 4 star rated and consistent performer.

Go through this link Value Research: The Complete Guide to Mutual Funds

Choose your pick from the 4 and 5 star rated funds and ideally stick to dividend funds as the money is locked for 3 yrs and secondly after the recent guidelines dividend declaration is stringent. The reason for sticking to dividend option is because you will be able to get back some money(tax free for the time being) if the market tanks up. or else one will hopeless spectator of losses unlike regular equity funds where you can exit in a day or two.

My opinion Canara Robeco Equity Tax Saver-D(Mid-cap), HDFC Taxsaver-D(large-Mid cap) and Sundaram BNP Paribas Taxsaver(Large-Mid cap).

I still stick to basic pen paper method, donno why I dont feel comfortable investing online. All the MF's have website and forms available along with SIP and Bank Mandate forms. Fill them up one cheque and attested PAN copy either courier or simply visit the local office. With regard to keeping an eye on investments majority of the MF's are handled by CAMS or Karvy, both of them will mail you monthly statements before and after purchase and some send sms's too.

Bookmark valueresearch or Moneycontrol and keep and eye, make record through an excel sheet.
 
Birla tax saver 96

icici prudential tax plan

hdfc tax saver

or reliance tax saver..

As a thumb rule, when it comes to elss, always go for a little conservative funds and preferably fund houses.

All go for dividend option.. With elss your money is blocked anyways for 3 yrs.. Getting back something during the 3 yrs thru dividends is always d smart option.

If you wanna make higher returns along with long term investments, open ended funds is d way to go.. Dont mix an elss with high returns thru equity
 
have all of them ..biggest gainer has been reliance tax saver ...wihch i will dispose off thsi year
 
i am also invested in quite a few

i dont like SBI much, they dont pay u monthly

i suggest taurus tax saver, i am getting about 10% returns every month, at least till now..
 
^^ 10% monthly is 120% annualised. :O 1 year returns are 64% and three year is around 21%.. hows that possible?

A good ELSS fund will give you around 20% returns annualised. I think that should be the benchmark, especially look at the last 3-yr returns, it will give you the approx idea about how will the fund perform. Last three years(2007-10) can be a good idea to test the funds ability because market touched both great highs and suffered great losses, the ability of the fund to give 20% annualised in these 3 years will be great indicator how will the fund do in upcoming times especially when the only option is to stop SIP(which is bad idea IMO) in an ELSS and not able to come out of the fund.
 
Sanav3 said:
preferably select Dividend reinvest option instead of growth...
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Divident reinvest is pretty much like growth. Both would yield the same amount. Only difference being the no. of units you would be having in divident reinvest may be more, but then again the NAV would be less.

I would say, go with the growth option in case you are looking it as an investment and tax saving tool. If you are mainly intersted in tax saving (of course with returns on investments, but not what a growth fund can get you) then you should go in for dividend.

I prefer the going the growth way.
 
Thanks a lot guys for puring the suggestions. Really appreciated the work :)

If you wanna make higher returns along with long term investments, open ended funds is d way to go.. Dont mix an elss with high returns thru equity
Click to expand...

I didn't get this !

Now as per the suggestions I have decided for

1. Canara Robeco - D --- 4k (Mid-Cap)

2. HDFC Tax Saver --- D --- 3k ( Mid--Large)

3. Reliance Tax Saver/ Taurus Tax Shield-D (Mid --Large Cap) ---- 3k

Now I dont understand why Value Research rates Reliance Tax Saver at just 3 -star inspite of its good perf. ANyone else vouches for Taurus ? It seems really good returns with a very good mixed portfolio. As of Sundaram BNP Paribas I am a bit sceptical about its portfolio :P

Religare tax saver is also rated very high....anyone invested in that.

As of now I prefer something like FundsIndia (FundsIndia - Mutual funds and more...) because it will be easier for me to apply , monitor , track and reinvest the dividends from a single place. As of now there are no charges. Just that I hope once I get allocation I can always check the authencity and regular units at the fund houses directly .

Divident reinvest is pretty much like growth. Both would yield the same amount. Only difference being the no. of units you would be having in divident reinvest may be more, but then again the NAV would be less.

I would say, go with the growth option in case you are looking it as an investment and tax saving tool. If you are mainly intersted in tax saving (of course with returns on investments, but not what a growth fund can get you) then you should go in for dividend.

I prefer the going the growth way.
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Actually seeing the way market scales around going for Dividend is not bad considering you re-invest the dividend into other tax-instruments at proper time. Being into Growth into a long bear market might become really painful. Isn't it ?
 
I am a regular user of ELSS schemes.

I have my investments in

SBI MAGNUM TAX SAVER
HDFC TAX SAVER
DSP BR TAX SAVER
PRINCIPAL PERSONAL TAX SAVER

I am continuing with HDFC TAX saver.
while introducing canara robeco this year and last year I added Birlasunlife Tax Relief 96 (may b e there is some change in name)

Not going to hold SBI as the performance is laggard.
dont recomment DSP / Principal any more.

My suggestion would be.

HDFC 4 K
Canara robeco 3k

and additional suggestion would be
BSL Tax Relief 96 (Birla Sunlife) 3k
 
Dividend re-investment is almost same as growth, no difference IMO. Dividend payout means you get an option to invest elsewhere(or spend), and growth option for lock-in of three years is something which isnt suggested, atleast you get back something on the way. There is no significant difference in returns between Growth and Dividend plan.

Acc to Value research only Canara Robeco and Tauras has 20%+ annualised returns in the last 3 years. I think Tauras will be the right choice over Reliance.
 
Thanks Doc for the suggestions :) Do you go in for dividend or Growth. Now that SEBI has made it clear on how to pay dividends....it should not negate a Dividend fund much compared to Growth

Also on what platform you invest in ELSS ? Should I approach individual fund houses and do it the old fashioned way ( filling forms and couriering them) That way I dont know which day I am alloted the SIP plus dates are also not quite flexible. If I do it online via FundsIndia or similar portals.

1. I can choose any of the 3- dates of the month and can easily split the 3 X ELSS @ say 5th, 15th and 23rd of the mnth. That way volatility should be better managed.

2. I can invest in MFs, equity , ELSS etc all the same place at no charges ( except equity)

3. No need to courier forms , fill up again & again for seperate fund houses. All complexity is taken care of by the portal

Only concern is what time they take to process the ELSS applications (they claim its 1-2 days max) and how sooner they update once you xfer the money or do an ECS mandate.
 
setuniket said:
Dividend re-investment is almost same as growth, no difference IMO. Dividend payout means you get an option to invest elsewhere(or spend), and growth option for lock-in of three years is something which isnt suggested, atleast you get back something on the way. There is no significant difference in returns between Growth and Dividend plan.

Acc to Value research only Canara Robeco and Tauras has 20%+ annualised returns in the last 3 years. I think Tauras will be the right choice over Reliance.
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I myself prefer dividend... as I get the money back..

But I never end up reinvesting it, so if you want to force yourself into it growth sounds good to many ppl... but here dividend reinvest is better as in a good market your NAV count increases a lot and there's comparatively less erosion of wealth during bad markets day..

Just pick up any fund and calculate by investing a amount in growth few years back and same amount in dividend reinvest and check da difference
 
Also is Expense Ratio of 2.5% a big concern ? How is it calculated. I see HDFC tax Saver its just 1.94% or so
 
^^^^^

Supra stick to top rated fund houses in elss schemes. Dont go by recent return patterns but by 3-5-10 yr track records.

Also if u wanna invest it the physical way, all forms have the exact sip date mentioned on them, you simply have to click your preference.

Canara, sundaram, taurus have performed in stop go's whilst the likes of birla hdfc reliance and icici have always been consistent..
 
remember... all ratings are based on previous performance and may not be sustained in the future..

as suggested by everybody.. pick some funds. invest and forget about them for 3 yrs.

my reco > canara, Fidlity, HDFC

btw, i made my first ELSS investments in a few top rated funds 2 yrs ago, markets crashed, and they have hardly reached their cost price now.
 
As of now I am sure about Canara Robeco Tax Saver-D(35%) & HDFC Tax Saver-D(40%). The last fund I am willing to risk a bit and can go for growth option. So I am looking for Taurus Tax Shield/Religare Tax Plan (25% in either) as their portfolio seems quite balanced.

Considering these 3 I guess the protfolio becomes more or less balanced in various sector and between large & mid-cap.

Also one thing camde up in my mind...is it preferable to go for funds with lower NAVs and thus securing more units rather than go for say like HDFC where the NAV is quite high and you get quite less units. This is a concern since I am going for Dividend. So shouldn't be HDFC in Growth mode ?

Also this is really tedious these days to go in offline mode as KYC forms need to be submitted and verified for every application. That is on top of the MF application. Also to transact online on fund houses's website also a PIN is required again for which application form + PIN form + KYC form needs to be submitted !
 
Supra said:
Thanks Doc for the suggestions :) Do you go in for dividend or Growth. Now that SEBI has made it clear on how to pay dividends....it should not negate a Dividend fund much compared to Growth

Also on what platform you invest in ELSS ? Should I approach individual fund houses and do it the old fashioned way ( filling forms and couriering them) That way I dont know which day I am alloted the SIP plus dates are also not quite flexible. If I do it online via FundsIndia or similar portals.

1. I can choose any of the 3- dates of the month and can easily split the 3 X ELSS @ say 5th, 15th and 23rd of the mnth. That way volatility should be better managed.

2. I can invest in MFs, equity , ELSS etc all the same place at no charges ( except equity)

3. No need to courier forms , fill up again & again for seperate fund houses. All complexity is taken care of by the portal

Only concern is what time they take to process the ELSS applications (they claim its 1-2 days max) and how sooner they update once you xfer the money or do an ECS mandate.
Click to expand...

I used to go for Dividend reinvestment but some IT officials consider Reinvested dividend as new investment and lock it. (Now this is cleared up by GOI that it should not be an investment).

Thereafter I started using growth option by my 2 matured investments I cant withdraw as after going high they matured in busted times.

Now a days I always opt for Dividend Payout in ELSS, as it keeps reducing the exposure and booking profits with new rules it will be more beneficial imo.

Regarding dates of SIPs yes you should always space them well to tide over the volatility.

How to process investment / forms / entry:
1. Regarding portal of entry, If you go to the Fund house office personally, and get your form stamped before 3 pm your application will be processed same day and you will be alloted folio no. next day or when your payment has realised.

2. There are advisories like Prudent / NJ India Invest / Karvy who service you and collect all the forms from you and they dont charge you anything.

I have experience of all three, i will rate Prudent > NJ > Karvy.

3. Even Sharekhan allows from their internet client, immediate purchase and sell of mutual funds without any charge.

4. Now a days almost all fund houses require first purchase physically and then they allow repurchase / sip / stp / swp / redemption through their websites.

You can use that way also.

Way of tracking portfolio :
NJ / Prudent have wonderfull website to track your investments.

Valuresearch online has now updated their MF portfolio tracker which is also good and has SIP function also.

My personal advise:

Do not discount PPF out of your portfolio.
It gives 8% compounded interest, the interest accured is completely tax free right now.
And its has the backing of sovereign security.
Personally I feel you must have atleast 5% of your tax saving corpus in to the PPF.
as my PPF account is near maturity now a days I am more into PPF as it effectively going to give me more tax incentive.
 
^^ Wow just awesome suggestions.

As of PPF...I already have around 10% exposure already in PPF/VPF and 10-15% in LIC HIP/ULIP. For the rest I was looking for ELSS schemes for myself as well as my wife.

I will try and contact Prudent and some fund houses ( Canara Robeco & HDFC Tax Saver) and see how it can be done. If it involves too much paper work individually, I will rather go the FundsIndia way. I want a system where I submit one application form and one KYC form and want to use it for all investments in future. Also is there any option other than ECS for SIP ELSS ? I want something like an Alert SIP wherein I can xfer the funds 1-2 days before the due date via netbanking through an online interface.

Also can you plz give me the weblinks for Prident & NJ ?
 
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