Investrack Financial Services

Most of the people who want to do tax saving in 80C are confused if they should invest in PPF or ELSS (tax saving mutual funds). Both PPF and ELSS offer taxation benefits of upto Rs 1.5 lacs under sec 80C. ELSS vs PPF – Meaning Lets start with their meaning and what exactly they are. PPF means public providend fund. Its a govt scheme which is run by post office and its a very safe financial product. There is no risk to it because its guranteed by govt of India. Its quite famous among investors for its safety and assured returns. On the other hand ELSS (Equity linked saving scheme) is fairly new financial product in India (from last 15 yrs). Its mainly a equity mutual fund which gives you income tax benefit. Equity mutual funds mainly invest in stocks of companies, which makes sure that they deliver high returns, but at the same time they are risky (actually volatile) and their returns keep going up and down. Now, lets compare PPF and ELSS on various parameters. #1 –

In the world of mutual funds, there are various kinds of categories for different requirements and risk appetite. One of the categories I want to talk about today is “Balanced Advantage” Category. What are Balanced Advantage Mutual funds? In one line, a balanced advantage fund dynamically shifts between equity and debt depending on the market valuations. What it means is that when the markets are over heated and high, the fund decreases its exposure to equity and move the money into debt, so that if the markets fall, the down side is protected. In the same way, when the markets are on lower side, the fund  increases the exposure to equity  and reduces the debt side. This strategy significantly reduces the volatility of the fund compared to an equity fund and at the same time, the returns potential also comes down. A lot of funds in this category also name their funds as “Dynamic Asset Allocation Fund” rather than “Balanced Advantage” Some of the examples of the funds