Is ELSS good or bad?
You can have good returns, but there are also chances of an investor making low to negative returns hence don’t invest in an ELSS if your time horizon is 3 years. Invest for the Long term….
| NIFTY 500 Index: 3-Year Rolling Return Range | |
|---|---|
| Minimum return | -21.7\% |
| Maximum return | +68.6\% |
| Median return | +12.5\% |
Is ELSS fund risky?
Although ELSS funds have the highest potential to generate returns when compared with other tax-saving products, these returns come with an element of risk. This is because equity is considered to be a risky asset class exposed to volatility and market fluctuations.
Is ELSS one time investment?
ELSS Funds With a lump-sum payment, your investment is unlocked all at once three years after purchase. For example, if you deposit Rs. 1.5 lakh in an ELSS on March 31, 2019, your money will be invested until March 31, 2022. Individuals benefit from both one-time investments and SIPs for mutual fund programs.
Why should you invest in ELSS funds?
Here are the 4 reasons why you should invest in ELSS funds. First of all, ELSS funds are equity mutual funds. They are essentially multi-cap funds, i.e. they invest in companies of all sizes – large, mid and small – across all sectors. And being an equity mutual fund, it has the potential to create wealth over the long term through equities.
Are equity-linked savings schemes (ELSS) risky?
Yes, equity-linked savings scheme or ELSS funds are risky. Since these tax-saving mutual funds invest in the stock markets, they come with equity-related risks. If the markets go through a bear phase, even the best ELSS funds can see an erosion in the value of their portfolio.
What is the average return of ELSS funds in India?
Considering that ELSS is a type of multi-cap equity fund, its long term returns must be high. In India, average return of an equity dominant portfolio should be 12\%+ p.a. Let’s see the long term performance of all ELSS funds clubbed into one specific category (Equity: ELSS):
What is the difference between ELSs and other multi-CAP funds?
But they differ in two main ways: Tax Saving: ELSS allows its investors to save income tax under section 80C. But other typical multi-cap funds do not have this benefit. Lock-in: ELSS funds lacks the liquidity benefit which other multi-cap funds provide to its investors. How? Units of multi-cap funds can be sold anytime.