Equity Linked Savings Scheme, commonly known as ELSS, is a type of mutual fund that enables investors in India to build long-term wealth and earn inflation-beating returns, along with Also provides tax benefits under section 80C. ELSS funds have a lock-in period of three years and invest predominantly in equity or equity related securities. Unlike traditional tax-saving investments like fixed deposits, Public Provident Fund (PPF) and other post office savings schemes, ELSS funds are popular among investors who want to reduce their tax burden and earn higher returns . Generally, SIP is mostly preferred when it comes to Mutual Funds, but since the new financial year has started, investors who want to invest in ELSS funds are wondering which route to go for, SIP or lump sum investment. Should do, let’s find out from various industry experts.
Santosh Navalani, COO, ET Money
ELSS or lump sum investment in mutual funds does not matter. Both are ways to invest in equity. SIP does not have any special advantage over lumpsum investment. Indian markets have maintained a bullish trend over the long term, so if you just invest, you will do well. We have compared the monthly SIP returns with the yearly SIP returns in different time periods (see two charts). While the returns were better in percentage terms in annual SIPs, the final corpus was higher in case of SIPs. The reason is simple: The investor gets 11 months of gains in the SIP.
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Ankush Bali, Financial Portfolio Manager – PGDBF | Limra | MDRT | amphi registered
Sip will be the best way to invest Elss in FY24, can be done in lump sum if there is a huge fall in the market.
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