Good Tax Saving Funds

Q. I want to invest for both good returns & insurance cover. Suggest the best options.
Pavan
A. For life insurance, take a term plan from any insurer. For good returns, invest systematically in some well performing equity diversified funds like Franklin India Prima Plus, HDFC Equity or Reliance Vision.

Q. Which would be the best funds for saving taxes under section 80C?
A. For saving taxes choose from well rated ELSS funds. You can choose from HDFC Tax saver, Magnum Tax gain, Birla Sun Life Tax Relief '96, Sundaram BNP Paribas Taxsaver.

Q. Can I invest my money in PMS schemes?
Vandana Hake
A. PMS services are ideal for HNI (High Networth Individuals) who do not have time to manage their money. However PMS services are not properly regulated in India. The system is also not very transparent. One should carefully investigate the terms and conditions before opting for such services.

Q. I am an insurance agent. I usually tell people that I will double your money within 4 years. Is it true?
A. No. There is no guaranteed and quick way of doubling money. Investors should be disciplined and invest systematically.

Q. Please give information about future performance of LIC PROFIT PLUS Growth. A. LIC Profit Plus is a ULIP. Avoid investing in ULIPs as they have high charges which hamper the return on investment.

Q. Suggest better option - to purchase fund immediately before or after dividend payout.
O P Srivastava
A. Mutual funds dividends are nothing but liquidation of your own holdings. When dividend is declared, NAV falls by the same amount. Investing just before a dividend is declared, you will get back a portion of your invested amount. For growth of corpus, choose dividend reinvestment.

Q. I regularly watch FUND KA FUNDA. Please explain Large Cap, Mid Cap, Small Cap.
M.A. HUSSAIN
A. Companies are classified as large, mid and small cap based on the market capitalization that changes everyday. As per November 30, 2007 there were 72 large cap companies (market cap of over Rs. 15000 Crore). There were 212 Mid Cap Companies ( Market Cap less than Rs. 15000 Crore) and 2702 small cap companies ( market cap less than Rs. 2500 Crore).

Q. How is SBI Arbitrage Opportunities Fund?
A. SBI Arbitrage Opportunities was launched last year and has performed well in its category since then. It would be a good choice in the arbitrage category.

Q. Which are the best equity diversified mutual funds to invest?
A. You can choose from top rated equity funds like Reliance Vision Franklin Prima Plus, Birla Sun Life Equity, HDFC Equity.