MF Query Board

Could you suggest some gilt funds that are offering returns better than index funds in one year? Should I invest in those? - Ajaykumar Kshirsagar [EasyDNNnews:PaidContentStart]
 

On the return chart, the gilt mutual fund category is among the top performers and 13.24 per cent is the average annual return reported by the category. The top achievers in the group, though, are providing up to 16 per cent in a year. Even the category’s weakest performer is providing double-digit gains. Mutual fund managers think that a number of favourable variables on both the domestic and international fronts may help these schemes continue to perform well. Investors in mutual funds might wonder if they should risk their money on these schemes. The decline in G-sec rates has a direct impact on the returns of gilt funds.
 

The benchmark 10-year G-sec yield is currently less than 7 per cent, down from levels above 8 per cent. The optimism in the long-term debt market is also being boosted by expectations of additional interest rate easing. The market has potential for a rate reduction of 50-75 basis points, according to fund managers. The news is good for gilt funds. Global factors have caused a spike in oil prices during the past week, but market participants don’t think the slight price increase will ruin the celebration. Managers of investment funds advise carefulness while purchasing gilt funds. Some fund managers think that the long duration market, which includes gilt funds, would experience high volatility.
 

Retail investors should therefore exercise caution. If you recall, gilt funds were providing returns of 1 per cent to 2 per cent over the same period last year. In a flash, the situation has flipped. Retail investors should invest in dynamic bond funds or short-to-medium duration funds if they want to gain from the bond fund market’s boom. Investors may run a risk by investing in gilt funds at this time. These schemes are extremely unstable. It is better to invest in either short duration funds or dynamic bond funds, which can expose your scheme to long duration gilts if you wish to take on some risk in exchange for rewards.
 

Which mutual funds or ELSS offer the most tax savings for 2023 investments? - Rituraj Soni
 

Everyone appreciates Income Tax Section 80C which permits a tax deduction of up to Rs 1.5 lakhs every fiscal year. In actuality, the majority of wage employees begin saving or investing under Section 80C as soon as they receive their first salary. Consider investing in tax-saving mutual funds or ELSS if you are looking to reduce your tax burden this fiscal year. A poor market can even cause you to lose money. Thus, why should you buy ELSS’? One is that these schemes may provide larger profits over an extended period of time. These plans, as you are aware, invest in equities. Also, equities often have larger long-term returns than other investments.
 

For instance, over a 10-year period, the ELSS category had an average return of almost 15 per cent. Two, among investments that save taxes, ELSS’ have the shortest lock-in time. Government-backed investments make up the majority of the other Section 80C basket investment alternatives. They frequently have longer lock-in times. A 15-year product like PPF or NSC, for instance, enables partial withdrawals after six years. So, you should invest in ELSS’ if you want access to your money in three years. Therefore, don’t expect it to provide you with excellent profits in three years. Equity investing is something you should constantly keep in mind as a long-term strategy. Only if you have a five to seven years’ financial horizon should you invest in equities mutual funds.
 

The third and most crucial thing to keep in mind is that ELSS’ are a fantastic beginning point for many investors. Many investors begin with ELSS’ and the three-year lock-in period that is required in these plans enables them to withstand stock market volatility. Some investors start putting more money in equity programmes once they can see the advantages coming, say, five or seven years from now. Here are our suggested ELSS’ for you to consider investing in the forthcoming year if you are interested in participating in these schemes. The last two months have seen Axis Long Term Equity Fund and Invesco India Tax Plan Fund in the fourth quartile.
 

The top mutual funds to invest in for tax-savings or ELSS in 2023:

■ Axis Long Term Equity Fund
■ Canara Robeco Equity Tax Saver Fund
■ Mirae Asset Tax Saver Fund
■ Invesco India Tax Plan Fund
■ DSP Tax Saver Fund n Quant Tax Plan (new addition)
■ Bank of India Tax Advantage (new addition) 

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