Should I add more mutual funds or invest more in existing schemes?

I am 24 years old. I have just started investing in mutual funds. I don’t have a long-term investment goal but I am trying to avail the 80C benefits by investing in an ELSS. Currently I have invested Rs 50,000 each in two ELSSs – Quant Tax Plan Fund and Mirae Asset Tax Saver Fund – was looking to invest an additional 50,000. Should I invest in another ELSS fund like Canara Robeco Equity Tax Saver or should I invest more in the existing MFs?

-Diptesh Mahajan

You should find out first how much you need to invest in ELSSs to claim full tax benefits of the Section 80C. You can claim a maximum benefit of only Rs 1.5 lakh in a financial year. Your EPF deduction, life insurance premium, and so on are also covered under section 80C. So, first find out how much extra you can invest to exhaust the Section 80C.

You need not invest in more than one or two ELSS funds to diversify your investments. Most of these schemes are run as flexi cap schemes. You can invest the extra money in Mirae Asset Tax Saver Fund. Quant Tax Saver has been doing very well for the last two years, but you should keep a close watch on it. Quant-based investing is not yet established and we don’t have much data to take a call on the investment strategy.

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