How to Select a Tax saving Fund?

Tax Saving Funds seem to be the flavor of the day now, with more and more funds coming up on a daily basis it becomes very difficult to select the most appropriate fund. How do you select a good tax saving fund. What are tax saving funds. They are basically Mutual funds through which you can save tax as well as save money(is it sounding right). Anyways its a good investment opportunity. I was looking around and one very premium site for personal finance puts it in five easy steps.

1. Before investing in such a tax saving fund ensure that it belongs to a fund house that has a well defined investment process.

2. Go for funds that have a broad investment mandate that permit them to invest across the market with any investment style(growth, value)

3. The tax saving fund must be well diversified across stocks and sectors

4. Keep in mind the NAV returns visavis the benchmark indexes over a long period of time.

5. A good tax saving fund would be one which has given a higher NAV return at lower volatility.

1 comment:

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