Motilal Oswal ELSS Tax Saver Fund for Growth Invest Now

Of the options, the Motilal Oswal ELSS tax saver fund may be attractive for investors who wish to invest in the equity markets and also benefit from the tax advantages of ELSS.

Investors who choose to stay invested for a long period of time and let the potential gains continue to stay invested in the fund will be interested in the Motilal Oswal ELSS  tax saver fund Regular Plan Growth option.

Understanding the Motilal Oswal ELSS Tax Saver Fund

The Motilal Oswal ELSS tax saver fund is a tax saving mutual fund. The principle of ELSS funds is mostly invested in equity and equity-related securities with a lock-in period of 3 years per investment.

What Is an ELSS Mutual Fund?

ELSS is Equity Linked Savings Scheme. Equity mutual funds can qualify for tax deductions under Section 80C of the Income Tax Act, subject to the applicable conditions, rules, and tax regime.

The main investment area of an ELSS fund is primarily stocks and shares. Its returns are thus sensitive to the performance of its underlying stocks.

How Does an ELSS Fund Work?

Investors pool their money with other investors in an ELSS mutual fund. The fund manager then invests the corpus according to the scheme’s investment objective and strategy.

The scheme’s mandate determines the companies in the portfolio, and the fund may invest across different sectors and market capitalisations.

The net asset value (NAV) of the mutual fund determines the value of your investment.

The NAV can increase if the portfolio’s underlying assets are performing well. Poor performance of the equity market and/or individual securities may cause a decrease in the NAV.

That’s why ELSS shouldn’t be regarded as a locked up tax saving investment.

About Motilal Oswal Asset Management Company Limited

The asset management company (AMC) in relation to the scheme is Motilal Oswal Asset Management Company limited. An asset management company (AMC) manages mutual fund schemes and oversees their investment operations.

AMC is very significant in research, portfolio management, risk management and fund administration.

But for investors it’s not only the name of the fund house that is important. A thorough analysis of the particular scheme, its portfolio, investment approach, charges, and track record, along with the scheme’s risk profile is also important.

Market risk does not go away simply because you have a “well-known” fund house. The underlying securities and market conditions remain important factors in determining your investment.

Motilal Oswal ELSS Tax Saver Fund Regular Plan Growth

The Motilal Oswal ELSS tax saver fund Regular Plan Growth is a mix of two ideas which the investors need to understand separately: Plan type and an option.

The Regular Plan typically uses intermediaries to distribute and the cost structure may be different than a Direct Plan.

The Growth option, on the other hand, consistently increases assets within the plan and doesn’t make any periodic payments.

Understanding the Regular Plan

Most of the time, investors buy a Regular Plan through a distributor.

An investor should thus compare the expense ratio of the involved plan and the effects of costs over the long term, before choosing a plan to invest in.

Understanding the Growth Option

The investor won’t receive any periodic income distributions from the scheme unless the scheme has made some income for the investor, with the Growth option.

How Growth Helps Compounding

People sometimes refer to compounding as “return on return.”

As far as investing goes, it’s best to have your potential gains invested, so that they can grow on a bigger base.

But, the returns of mutual funds are not guaranteed. Hence, there is a possibility of compounding in case of equity mutual funds, but not a certainty.

How Does Motilal Oswal ELSS Tax Saver Fund Work?

A simple process is followed.

You invest in the scheme either in a lump sum or SIP. According to the investment strategy the fund spreads the funds among securities. The NAV corresponding to each unit determines the value of your units.

The value of the portfolio could increase or decrease over time as the stock market goes up and down.

Investors should keep track of not only the three-year ELSS lock-in period but also the lock-in period of each investment because they may redeem different investments in the portfolio on different dates.

This means that it is important to distinguish it when investing through SIP.

Each SIP contribution is an independent investment and will also normally come with a three year lock-in period.

Investment Objective of the Motilal Oswal ELSS Tax Saver Fund

The main purpose of an ELSS fund is to give investors a chance to invest in equity markets with the tax saving benefits only available to investors in ELSS under the existing tax laws.

It is important to review in the latest official scheme documents the actual investment objective and the investment strategy.

Investors also need to keep in mind this key point: An objective of an investment is not a guarantee of returns.

The fund manager may adhere to the stated strategy, but not any equity fund can ensure that the market will travel a certain direction.

How to Invest in Motilal Oswal ELSS Tax Saver Fund

Investors can invest in mutual funds through a suitable investment platform, distributor, or any other authorised channel.

Take care when ordering a scheme. Choose the right plan and option, and ensure that you use the correct scheme name.

Investors with a specific investment goal of Motilal Oswal ELSS tax saver fund Regular Plan Growth should ensure they have chosen the right Regular Plan and Growth.

Fill KYC process and transaction details and select the SIP or lump sum as needed and confirm the transaction details.

Why Long-Term Discipline Matters in ELSS Investing

Every market will be going up and down. Every year can be a great year – and some years can be challenging. By sticking to a long-term investment strategy, investors can prevent themselves from making emotional choices due to short-term market fluctuations.

Apart from the tax saving potential, the investor should always keep in mind the suitability of the portfolio, time horizon, risk appetite and overall financial planning while investing in Motilal Oswal ELSS tax saver fund.

Conclusion

Investors who are looking for an equity-oriented investment who can enjoy the tax-saving structure given by ELSS can consider the Motilal Oswal ELSS tax saver fund.

The relationship of Motilal Oswal Asset Management Company limited in the management of the scheme is vital; however, investors should not judge the fund-house name.

FAQs

1. Is Motilal Oswal ELSS Tax Saver Fund suitable for beginners?

Ans) It might be appropriate for new investors with an equity risk management understanding and long investment horizon with a three-year lock-in.

2. What is the lock-in period for ELSS?

Ans) Each SIP amount for ELSS investments comes with a three-year lock in period, wherein each SIP installment might have a separate lock-in period.

3. Can investors use SIP to invest in ELSS?

Ans) Yes, investors can make periodic investments in an ELSS scheme through SIPs (as per the investment facility available).

4. Is the Regular Plan Growth option suitable for long-term investment?

Ans) It could be appropriate for investors who want investing assistance and/or would like to postpone taking their profits under the Growth choice.

5. What should investors check before choosing an ELSS fund?

Ans) Review the investment objectives, portfolio and risk, fees, returns, history and lock-in period of the fund and suitability for your financial objectives.