I am 24-years old and started investing Rs 2,000 a month in Canara Robeco Equity Tax Saver last year. But I find the current performance not as impressive as of some other funds. Is it wise to quit or should I continue to hold this fund?
Sudheendra Rao, Mysore
Your efforts to save taxes by investing in tax planning funds work better when you invest in lump sum and not SIPs. When you invest through SIPs in tax planning funds, every instalment in the scheme is locked-in for three years from the date of investment. This limits you from exiting the fund entirely if performance is poor, which is the case with your investment at the moment. This fund’s performance has dipped in recent times, but it has fared well in the past, which is visible from its long-term returns, especially over 5 and 10 year time frames. Lesson from this investment is to make lump sum investments in tax planning funds and select funds that are highly rated with a proven track record and performance history from the OLM Elite list that is published every month and is available on our website.
