Introduction
The tax burden has taken your goodnight sleep? Worry not, let us find the solution together. Try investing in the ELSS category which is a unique fund scheme offering tax benefits. The ELSS are Equity Linked Fund Schemes, covered under the 80 C section of the Indian Taxation Act of 1961.
This begs the obvious question of which fund house offers the best returns in this category. The HDFC ELSS Tax Saver Fund is a prominent player in the market nowadays. Being launched on 05.03.1996 it has a standing AUM (Asset Under Management) at Rs.13820 Cr as of 29 Feb 2024. It reflects the number of investors that have put their trust in this fund scheme. To act as a cherry on the cake, it has generated 22.07% returns since its inception.
In this article, we will delve into the goals and aspirations that this scheme strives to achieve. Closely we will understand the part played by the manager Ms Roshi Jain in managing this scheme. Additionally, also identify the merits and demerits of investing in HDFC Tax Saving Plan. Let us begin with our analysis.
Identifying Fund’s Main Goal
- The approach focuses on investments in stocks from various industries. It focuses on capitalizing on their potential for better returns than bonds or fixed deposits.
- By distributing assets across several industries and market sizes, the portfolio seeks to reduce risk. It ensures that performance does not depend on any particular industry or firm.
- Investments are based on extensive examinations of firms, considering earnings growth, management quality, and industry trends. It discovers solid companies with long-term development potential.
- The approach includes strategies for reducing downside risk. Such as establishing exit points for underperforming equities and balancing portfolio allocation.
- Emphasizing a long-term view matches capital appreciation over time, encouraging investors to remain involved.
Listing some Pros & Cons of HDFC ELSS Tax Saver Fund
Investing in this scheme has its advantages & disadvantages to it. Let us break them into simpler words.
Starting with the merits of investing in this fund scheme:
Tax Benefits
As an Equity Linked Savings Scheme (ELSS), HDFC ELSS Tax Saver Fund provides tax benefits to investors under Section 80C of the Income Tax Act, allowing them to claim deductions of up to Rs.1.5 lakh.
Potential for Significant Returns
As an equity-oriented fund, HDFC ELSS Fund has the potential to provide significant long-term returns by capitalizing on the stock market’s expansion.
Lock-in duration
While ELSS funds have a longer lock-in duration than other tax-saving vehicles such as PPF or NSC, it promotes long-term asset accumulation and disciplined investment.
Professional Management
The fund is managed by skilled professionals such as Ms Roshi Jain, who use their skills to make sound investment decisions that maximize returns for investors.
Now that we know the cons of investing in this scheme, take a quick peek at learning the cons as well.
Market Risk
Because the HDFC Tax Saver Fund invests largely in stocks, it is subject to market swings and volatility. During market downturns, the value of investments might fall.
Higher Risk
Equity investments are fundamentally riskier than debt or fixed-income securities. Investors can expect variations in the value of their investments.
Performance Dependency
The fund’s performance is influenced by a variety of factors, including market circumstances, the economic climate, and the fund manager’s actions. Poor performance might mean lesser profits for investors.
Expense Ratio
Like every mutual fund, HDFC ELSS Tax Saver Plan has an expense ratio that is taken from its assets. While this charge covers management costs, it may somewhat diminish total profits.
In conclusion, it is necessary to keep both pros and cons in mind when investing in a fund scheme. It will help in making a well-informed decision for a smooth investment journey.
Can we invest in this fund via SIP?
The short answer to the above question is yes. SIP is the best option to invest in HDFC ELSS Tax Saver Fund scheme or any other. It offers a systematic and disciplined approach to planning one’s future.
Investors should be aware that the mode of investment should be thought of properly. Make sure factors like objectives, and investment duration align with the mode of investment.
Let’s know the basic difference between SIP and a lumpsum investment. Although both options are a good way to start one’s investment journey, SIP offers numerous benefits in the long run.
In an SIP investor saves a fixed amount monthly and earns a collective return. Wherein a lumpsum investment allows us to invest a large sum all at once. SIP is a regular monthly investment & lumpsum is a one-time investment.
To sum up, both plans offer the opportunity to earn higher profits. Investing in this fund scheme will give a chance to create wealth as well as provide tax benefits.
Understanding the Role of Fund Manager
Meet Ms Roshi Jain (Fund Manager Equity)
Ms Roshi Jain is the talented Fund Manager of the HDFC ELSS Tax Saver Scheme. She is a seasoned expert with over 17 years of experience in research and investment management, having started her adventure on July 29, 2022. Ms. Jain earned a Post Graduate Diploma in Management from the reputed Indian Institute of Management in Ahmedabad. She is also a Chartered Accountant and a CFA charter holder.
Ms Jain’s extensive experience and skills make her an invaluable addition to the HDFC Flexi Cap Fund team. With her significant knowledge, she can confidently negotiate the complexity of the market, assuring the fund’s success. Investors may rely on Ms. Jain’s skills to steer the fund toward development and success.
Conclusion
To conclude, investing requires a well-rounded approach to understand the volatility of the market. When it comes to choosing an investment scheme, there are a multitude of factors to consider. Management, performance, and consistency are just a few of the key elements that come into play. That said, the HDFC Tax Plan ticks all the right boxes when it comes to determining its suitability as a wise investment choice. This fund is managed by an expert in the field, who has accumulated a wealth of knowledge and experience over the course of 17 years. With such an experienced manager, investors can rest assured that their money is in trustworthy hands. This uniqueness that the ELSS category offers helps in creating wealth while giving tax benefits. Starting an Online Systematic Investment Plan SIP is a flexible way to build long-term growth.
As we live in an evolving world, prior planning to save money comes in handy. Mutual Fund is the smart and sustainable way to build a good portfolio over time.