I would like to start investing under 80C for fiscal 2009-10 in the Tax Saver mutual funds (equity linked savings schemes, or ELSS) from April. I want to take up the option of systematic investment plan (SIP) for Rs4,000 per month. Please suggest how I should divide the funds, i.e., how many funds I should opt for and how much should be the division for each fund. Also suggest how long I should keep the funds (I know that the lock-in period for the Tax Saver mutual funds is three years).
It’s a good idea to start SIP for tax saving purpose and this is the right time too.
It would be better if you divide your money into two schemes. I think SIP for Rs2,000 in SBI Magnum Taxgain and another Rs2,000 in Sundaram BNP Paribas Tax Saver would optimize your investment for a period of three years. You should review your portfolio on expiry of the lock-in period.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.
You may send in your stocks and mutual funds related queries to firstname.lastname@example.org