Introduction
The worry of paying taxes is eating you alive? Stress not as we have developed a perfect plan for investors. Let us learn about the ELSS category, especially designed to reduce tax liabilities. These are Equity-linked fund schemes that fall under the Indian Taxation Act of 1961. Now investors can get confused about which fund scheme to invest in.
This reminds us about the Mirae Asset Tax Saver Fund which has gained a lot of popularity in recent days. Being launched on 1st Dec 2015, it has generated an 18.56% return since its inception. The Asset Under Management (AUM) for this scheme stands at Rs.21301.58 Cr as of 29 Feb 2024.
Join us as we take a deep dive into the essential elements and objectives of a specific investment scheme. Furthermore, we will explore the pros and cons of investing in this scheme, providing you with a comprehensive understanding of its strengths and weaknesses. We will start by delving into the primary goals and aspirations that this scheme aims to accomplish. By the end of this article, you will have gained valuable insights into this investment scheme and be better equipped to make an informed decision about whether to invest in it or not.
Studying the Fund’s Main Goal
The Mirae Asset Tax Saver Fund implements a very clear and systematic investing approach. Let’s learn about this with a little more detail:
Long-term growth is prioritized, with a focus on capital appreciation. Investors should be patient and focus on the potential for long-term growth. Avoid making judgments based on short-term market volatility and instead commit to long-term investing goals. Diversification is advantageous with investments distributed across many sectors, businesses, and asset classes to reduce risk and optimize rewards.
A thorough study is required to uncover high-quality equities and equity-related securities with significant growth potential. Consider aspects such as financial success, competitive position, and managerial effectiveness.
Regularly assess and monitor investment portfolios to ensure they are in line with long-term capital appreciation objectives. Make modifications based on market conditions and investing goals. Manage risk by determining tolerance and allocating assets accordingly. To lower overall portfolio risk, it divides the assets into different sectors.
What are the Pros & Cons of investing in Mirae Asset Tax Saver Fund?
The Mirae Asset Mutual Fund house provides several benefits to its investors. But to conduct a proper analysis of a scheme both aspects like pros & cons should be considered.
The following are some advantages offered to investors under this scheme:
Tax Benefits
One of the key benefits of investing in the Mirae Asset Tax Saver Scheme is the tax advantage provided by Section 80C of the Income Tax Act. Investors can claim deductions of up to Rs.1.5 lakh every fiscal year, which helps them lower their taxable income.
Capital Appreciation Potential
This fund invests primarily in equities and equity-related products to generate long-term capital appreciation. Equity investments have historically provided greater long-term returns than traditional investment alternatives such as fixed deposits or PPF.
Professional Management
Mirae Asset is a well-known and reputable asset management firm that specializes in fund management. The fund is managed by qualified experts who use research to choose stocks and manage portfolios.
Diversification
The Mirae Asset Tax Plan invests in a variety of sectors and companies, offering investors diversification benefits. Diversification helps to spread risk and mitigate the impact of poor performance in a single investment.
Openness
The fund offers frequent updates on its portfolio holdings, performance, and strategy to investors, guaranteeing openness. This enables investors to make educated decisions and monitor the performance of their assets.
Now that we have come to an understanding of the merits, let’s take a quick peek at the demerits as well.
Market hazards
Because Mirae Asset Tax Saver Fund invests largely in equities and stock-related securities, it is exposed to market risks. Stock price fluctuations and overall market volatility can influence fund performance. It can potentially result in losses, particularly in the near term.
Liquidity Risk
Equity investments can often be less liquid, making it difficult to sell holdings rapidly without altering market prices. This might be a worry for investors who want fast access to their assets.
Return Taxation
While investors receive tax breaks under Section 80C for their investments in this Fund, they are liable to capital gains tax on the fund’s returns. Short-term capital gains (investments held for less than a year) are taxed at a higher rate than long-term capital gains.
Performance Dependency
The Fund’s performance, like that of any other mutual fund, is influenced by a variety of factors. These include market circumstances, economic trends, and fund manager actions. There is no guarantee of returns, and previous performance does not predict future results.
Time to Talk about the Fund Manager’s Role
Meet Mr Neelesh Surana (Fund Manager Equity)
Mr. Neelesh Surana, with his extensive experience of 24 years, is entrusted with the crucial role of managing stocks at the firm. He has been a part of Mirae Asset since 2008 and currently serves as the Head of Equities. In this capacity, he leads the stock research and investment team, and his responsibilities include managing Mirae Asset’s stock funds in India and assisting with research for the company’s worldwide investments. Neelesh’s knowledge and leadership are of utmost importance when it comes to making investment decisions and expanding Mirae Asset’s stock portfolio. His expertise in the field has earned him a reputation as a trusted and dependable leader in the financial industry.
Conclusion
In conclusion, the Mirae Asset ELSS Tax Saver Fund is an appealing option for investors looking for tax savings as well as the possibility of long-term capital appreciation, particularly when using a Systematic Investment Plan (SIP). With its emphasis on long-term growth and diverse portfolio, the fund seeks to reduce risks while increasing returns for investors. The scheme’s tax benefits under Section 80C of the Income Tax Act, together with the potential for capital appreciation. The expert management by Mr Neelesh Surana makes it an appealing alternative for investors. They can increase their wealth while avoiding tax responsibilities.
Investors should, however, be aware of the market risks connected with equity investments, as well as the liquidity risk and taxation on gains. Before making any investing decisions, undertake extensive research and contact with a financial professional. Overall, the Mirae Asset Tax Scheme, with its qualities and the competence of its fund manager is a potential path for investors looking for tax-efficient wealth-building. It will boost chances in the Indian market, particularly through a systematic investing strategy.
