InvestorQ : Which one is better to invest in ELSS and a Nifty Index Fund for the long term?
Rashi Mehra made post

Which one is better to invest in ELSS and a Nifty Index Fund for the long term?

Answer
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9 months ago
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ELSS and Index funds are very much different from each other on various parameters especially ELSS funds qualify for income deduction of up to 1.5 Lakh per annum u/s 80C of the Income Tax Act but come with a mandatory lock-in period of three years. On the other hand, index funds are generally open-ended schemes and are relevant for those investors who prefer a passive style of investing. Thus both categories serve different purposes. We would recommend investors to prioritize ELSS as it is the only tax saving instrument which has the shortest lock-in period. However, investors need to choose an investment option based on their risk profile, investment horizon and align it to a realistic financial goal.

Recommended ELSSAUM (Cr)1Y3Y5Y
Axis Long Term Equity Fund(G)₹ 21,473201710.3
Mirae Asset Tax Saver Fund(G)₹ 3,06616.517.2--
Recommended Index Funds
HDFC Index Fund-NIFTY 50 Plan(G)₹ 1,04711.914.47.8
UTI Nifty Index Fund(G)₹ 1,82712.214.57.9
Note: Data as on Jan 21, 2020
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