Introduction
The need for financial safety is on the rise which means finding ways to plan a systematic saving plan. There are many viable options but among them, we have a unique investing option. Let us look at the Mirae Asset ELSS Tax Saver Fund as an investment option. Well, this fund comes under a special category which is the ELSS scheme.
This scheme was launched on 1st Dec 2015 and has generated 20.48% returns in the last three years. The Asset Under Management (AUM) of this scheme stands at INR 21,301.58 Cr as of 29.03.24. This scheme is covered under the 80 C Taxation Act of India.
In this article, we will cover the important details like fund purpose, manager’s profile, suitability to investors & many more. It will help the investor understand in detail the opportunities that lie with this scheme. Let us start the analysis by identifying the fund’s objectives.
Studying the Fund’s Objective
Understanding Scheme Objectives
To make educated investing selections, one must first understand the scheme’s objectives. The scheme’s principal goal is to achieve capital appreciation, which is the gradual increase in the value of investors’ capital.
Focus on Equity Shares
The plan invests largely in equity shares with high growth potential to maximize capital gains.
Secondary purpose
The program also attempts to offer investors dividends and other forms of income as a secondary purpose.
Income Generation
While capital appreciation is the primary goal, investors can also profit from dividends and other income sources.
Balanced strategy
The program takes a balanced strategy, stressing both long-term growth through smart equity investments and prospective income creation.
Financial Goals
Before making an investment choice, investors should match the scheme’s objectives. It is important to understand their own financial goals and risk tolerance.
What are the pros and cons of investing in the Mirae Asset ELSS Scheme?
This scheme offers numerous benefits to the investors. Let us study these two pros & cons separately.
The advantages of investing in this scheme are as follows:
Tax Benefits
Investing in the Mirae Asset ELSS Scheme may result in tax savings under Section 80C of the Income Tax Act. Deductions of up to ₹1.5 lakh from taxable income can be used to lower the total tax burden.
Growth Potential
This plan, which invests primarily in equity shares, has the potential for better long-term returns than other investment choices such as fixed deposits.
Professional Management
The Mirae Asset ELSS Tax Saver Fund is managed by skilled fund managers who base their investment decisions on extensive research and analysis, resulting in optimal investment performance.
Diversification
Investing in this program exposes you to a diverse array of equities from various sectors and businesses, which spreads your investment risk.
Lock-in Period
ELSS plans have a three-year lock-in period, which encourages disciplined investment and prevents early withdrawals, ensuring investors remain invested for the long term.
The disadvantages of investing in this scheme are as follows:
Risk of Loss
Investing in equities entails inherent risks, including the danger of losing money if the market performs badly or if certain stocks underperform.
No Guaranteed Returns
Unlike fixed deposits or other fixed-income investments, returns from the Mirae Asset ELSS Scheme are not guaranteed and are subject to market circumstances and the performance of underlying equities.
Suitability Considerations
This scheme may not be appropriate for individuals with a short investment horizon or those who cannot endure changes in the value of their assets.
Role of the Fund Manager
MR Neelesh Surana is the head of equity in the company with an overall 24 years of experience. Neelesh Surana has worked at Mirae Asset since 2008. As Head of Equities, he oversees the stock research and investing staff. His responsibilities include managing Mirae Asset’s existing equity funds in India as well as providing research assistance for the company’s worldwide mandate. Neelesh’s skills and leadership are critical in directing investment decisions and ensuring the expansion of Mirae Asset’s equity portfolio.
Who should invest?
Mirae Asset ELSS Tax Saver Fund may be suited for a range of investors, including:
Tax-conscious investors
Individuals wanting to save taxes under Section 80C of the Income Tax Act might consider investing in the Mirae Asset ELSS Scheme to take advantage of tax breaks while engaging in the stock markets.
Long-term investors
This scheme normally has a three-year lock-in period, which promotes long-term investment goals. Long-term investors may profit from possible wealth appreciation.
Equity investors
Mirae Asset ELSS Scheme’s concentration on equity shares may appeal to investors seeking exposure to equity markets with the possibility of better long-term profits.
Individuals with a moderate to high-risk tolerance
Investing in shares has inherent risks, including the chance of loss. This plan may be suited for investors who are willing to take on moderate to high levels of risk.
long-term Investors
Mirae Asset ELSS Scheme seeks long-term capital appreciation. This program may be suitable for investors with long-term financial objectives, such as retirement planning or asset creation.
Conclusion
In conclusion, participating in the Mirae Asset ELSS Scheme provides various advantages for investors seeking to avoid taxes while potentially achieving long-term growth. The scheme’s primary goal of capital appreciation, along with its focus on equity shares with promising growth prospects, allows investors to profit from the stock market’s rising trend. Furthermore, the scheme’s dual goal of generating dividends and other income streams increases its appeal to investors looking for both capital appreciation and income production.
The Mirae Asset ELSS Scheme, managed by seasoned fund manager Neelesh Surana, instills trust in investors. His knowledge guarantees that investment decisions are well-informed and based on rigorous study and analysis, thereby improving investment performance.
Furthermore, the scheme’s diversification across sectors and industries reduces investment risk, and the three-year lock-in period encourages disciplined investing and long-term wealth growth. However, investors should be aware of the dangers associated with equity investing, such as market volatility and the lack of guaranteed returns.
Overall, the Mirae Asset ELSS Scheme is appropriate for tax-aware investors, long-term investors, and those with a moderate to high-risk tolerance. It offers a Systematic Investment Plan (SIP) that is ideally suited for systematic investment planning. Investors seeking tax-efficient wealth growth will find this scheme a perfect match.
