I don't want to go for theoretical part since all other posts have covered it very well. ELSS Fund is a yummy tax-saver avenue which provides shortest lock-in period, i.e. 3 years, followed by 5-years lock-in period with bank deposit.
Keeping in mind that ELSS fund is not a risk-free avenue. But, there was quite a lot of misunderstanding about risk from people's perspective.
Do we not consider inflation a risk to our pocket? Can you say that any avenue which does not beat the inflation is called risk-free avenue? Of course not, inflation eats the money and in general, we need to go above that level to earn the real returns.
Granted, market risk is an ugly one which exist in ELSS. I believe mutual funds have disappointed with the last 2 years portfolio, didn't give a fine performance. But, if you have been investing in the stock market crash since 2008-2009, you will still have tripled your portfolio (including the amounts you've invested). Let me bring the fact here:
I believe ICICI Prudential Long Term Equity Fund is the oldest fund alive. Say we have invested Rs. 10,000 monthly since 15 years back yesterday (including Market crash 2008-2009):
Fund: ICICI Pru Long Term Equity (Tax-saving) Fund - Direct
From Starting Date: 25 Sept, 2004
To Today Date: 25 Sept, 2019
Amount Invested: Rs. 18,10,000
Current Value: Rs. 53, 66,266
SIP Return (Absolute): 196.46%
SIP Return (CAGR): 13.37% p.a.
Let's have discussion from here
@Ishu: What do you think of ELSS? Is it a good investment option? You can share your views on the same.
I do believe it's a very good option, especially for those who don't acquire good knowledge in fundamental and technical analysis but want to build wealth with yearly tax deduction benefit. I myself have been investing in this field but not long back. Now, I do believe it's a very good option.
@Anmol ELSS used to be a tax free investment previously, that was its biggest highlight. But, now it is not so.
True, the journey of husband tax-saver and wife tax-free lasted. But tax-saver (deduction upto Rs. 1.5 lakhs/year) has its own strength for us. I hope that wife will be back soon.
A question to all: Which ELSS Funds you have been investing in and why?