I have invested in DSP BlackRock Tax Saver and Mirae Asset Tax Saver. In the former I have invested Rs 5,000 and in the second fund, Rs 2,500.
I am considering an additional investment of Rs 7,500. But I want to do so only in ONE of the above funds.
Which one should I opt for? My investment horizon for this is 20 years.
- Prem
Let us start off by commending your perspective. It is excellent to see the long-term view you have taken. Very few invest in equity with such an investment horizon.
Also, you have opted for Equity Linked Savings Schemes, or ELSS. These are diversified equity funds that have a tax benefit under Section 80C of the Income Tax Act. We are assuming that you want to avail of this tax benefit, hence you are opting for ELSS and not a regular diversified equity fund.
Mirae Asset Tax Saver has put up some excellent numbers over the past two calendar years. Fund manager Neelesh Surana also instills confidence in us. He heads the equity function at Mirae Asset Mutual Fund in the capacity of chief investment officer. He is also known to stick to his convictions even if the situation is contrary to his investment decisions.
Having said that, it is a relatively new fund launched in December 2015. It has not yet completed 3 years hence does not even get a Morningstar Star Rating.
DSP BlackRock is a 4-star fund. Our analyst has assigned the fund a rating of Neutral. You can read his views here.
(The positive ratings are Gold, Silver and Bronze. A Neutral rating indicates that the analyst does not believe the fund is likely to deliver standout returns but also isn't likely to significantly underperform. The Negative rating is at the bottom of the ladder and positions the fund as an inferior offering when compared to its peers.)
Frankly, since you are taking such a long-term view, it really would not make much of a difference which fund you opt for.
Interestingly, a look at both their portfolios reveals 4 banking stocks in each, amongst the top 5 holdings. They both appear well diversified too in terms of number of stocks in the portfolio.
Also, it would also be wise to look at your portfolio and see if there are other funds from similar fund houses. It pays to diversify across styles and fund houses.
