Is it better to invest in one ELSS or multiple?
Diversification helps to curtail risks and stabilising returns. Investing in more than two funds does not result in incremental benefit. Besides, having too many funds can also make it difficult for an investor to track them. Investment in ELSS fund helps to get a tax deduction.
How many mutual funds should be in your portfolio?
Summing it Up As evident, by limiting the number of funds in your portfolio, you achieve diversification and ensure optimum returns. Regardless of the size, three to four funds are enough to make a well-rounded portfolio to enhance your riches.
Can I have multiple ELSS mutual funds?
You may consider investing in two or three ELSS funds. However, you may avoid investing in multiple ELSS funds as you could struggle to monitor your investment. Your investment in ELSS qualifies for a tax deduction under Section 80C only up to a maximum of Rs 1.5 lakh per annum.
Can we have 2 ELSS mutual funds?
How many mutual funds are too many?
Most individual investors require not more than 5-10 mutual fund schemes, depending on the size of the portfolio. These would include schemes across equity mutual funds, debt mutual funds, hybrid mutual funds, and ELSS funds.
Is it better to invest in multiple mutual funds?
While mutual funds are popular and attractive investments because they provide exposure to a number of stocks in a single investment vehicle, too much of a good thing can be a bad idea. The addition of too many funds simply creates an expensive index fund.
Should I invest all my money in ELSS?
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\% |
How many ELSS funds should you invest in in a year?
Since you can save only up to Rs 1.5 lakh in a year, one scheme is fine,” says P Srinivasan, Founder of Ace Financial Advisories. Many mutual fund advisors second the opinion. They believe that investors should not invest in more than two ELSS funds in a year.
What is the lock-in period for tax-saving mutual funds?
Investments in ELSS or tax saving mutual fund schemes qualify for tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. These schemes come with a mandatory lock-in period of three years, which is the shortest lock-in period among tax-saving investments permitted under Section 80C.
Should you have multiple elsss in your portfolio?
“The tax shouldn’t be a reason why you have multiple ELSSs in your portfolio. You can withdraw your gains in two instalments in March and April to get away from the tax. Even if you pay a tax of 10 per cent at this point, you will catch up with the better returns in the long term,” says Vishal Dhawan.
Should you choose a new ELSS scheme?
Many investors choose a new ELSS when their old tax saving scheme is not performing well for a year or two. This may result in several schemes in a mutual fund portfolio. In fact, many mutual fund investors eventually own more than half a dozen ELSS funds in their portfolio.