Dividend or Return on Tax Saving Funds
Satish asked here in a comment and I quote
I am 24yrs and would like to invest money which would help me to save tax & get good returns. I am planning to invest 30,000 in ELSS through SIP. How and what do you suggest? Do I first buy for 20,000 and then 1000/month or…? Also what do you think about Can robeco, Sundaram tax saver & quantum tax saver? What should I see, dividend or return before investing?
After suggesting Best Tax Saver Funds on the basis of dividend this is the questions of many readers of my blog asked as to what they should choose, Dividend or Return and so I thought I would write on this and clarify it to an extent I could.
Objective of your investment
You should focus on the objective of your investment. When I do investment in Tax Saving funds My prime objective is to Save Tax and secondary objective is ofcourse to gain some money. So if my prime objective is to save tax I should see how can I save maximum tax with minumum investment. I do so by getting my dividend back which I can use elsewhere.
Now is getting dividend the only objective. The answer is No and so I choose the best Dividend fund and invest in the ones with highest returns among them. Remember that funds give Dividend if they have good returns and if you see the list of best dividend funds you would hardly see any fund which has not given good returns but yes there is no conception without exception and Sundaram Tax Saver Fund is very good when it comes to Return but not when it comes to dividend.
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Hello i want to invest in mutual funds so can u pls tell me which is the best plan and what is the risk and all..
Amarnath, Have you seen http://shabbir.in/all-about-mutual-funds/
In the month of december 2009 I have invested in the following ways to save tax
i) 15K in HDFC tax saver growth scheme
ii)15K in ICICI Prudential tax saving growth scheme
iii)5K + 1500 SIP in CanRobeco tax saving growth scheme
Just read most of your posts and got more ideas to invest in future. I am planning to make some amendments in the above investments
i) Reduce SIP installments made in CanRobeco from 1500 to 500 and invest 1000 in other Mutual Funds (Equity Diversified not ELSS)
ii) Start 1000Rs SIP installments in existing ICICI and HDFC
Will these amendments be good in terms of return along with tax save?
TS, I would suggest you read – http://shabbir.in/best-tax-saving-funds/
Hi Shabbir,
Indeed a good article.
I’m a little confused over investing in BNB Paribas Tax saver and Canara robeco.. which one would be wise investment for high dividend and currently i would invest lump-sum ~40k.
I hardly see any difference than just the name and so I would not be worried too much on the name.
sir other than a taxsaver fund, which funds do u advise to invest into considering am just starting my investments apart from tax saving.. only for growth purpose..
i have been through your best of 2009 funds.. but am confused at picking one of them.. so if u can suggest any 2 funds to start, it would be nice of you
thanks
Go through my ebook and there I have mentioned quite a few of the best funds.
i have been through those.. but if u could suggest any 2 of them to start with?
Its your choice then. If you prefer Midcap go with the best Midcap funds.
There is lot of midcap activities these days now.
thanks..