would you recommend i redeem Franklin tax shield which is performing well?

POSTED BY sangitha shetty ON December 26, 2012 10:48 pm COMMENTS (7)


I had invested a nominal amount of rs 40 k in fanklin india tax shield around 2008 . This has now grown to 69k. I have been advised to redeem this. Do let me know if this is recommended as i was planning on closing and re-investing the entire amount.whilst checking what are the schemes that are doing well does include this same scheme,Religare Tax plan,HDFC Tax saver and ICICI prudential Tax plan. do let me know if it makes sense to redeem and re invest in same scheme..or let it remain as it is?

7 replies on this article “would you recommend i redeem Franklin tax shield which is performing well?”

  1. sangitha shetty says:

    thanks…its really clear now…so then i wont withdraw it and let it remain.

  2. A 4 star fund or a 5 star fund is a rating scheme given by MF tracking firms like value research morningstar india etc.

    This rating is a combination of short-term (few months) and long-term performance with different weightages

    Investors should look at long term performance, risk-return ratios and expense ratios and not at star ratings while investing

    You can use this guide for future investments

    Is your existing fund good? and what you should do as detailed above are different questions
    First has been answered above.
    What you should do with your investment depends on why you invested, what are your expectations in terms of returns are
    You have got an annualized return of ~ 11% over 5.5 years. Which is pretty decent for any goal. So your fund is good given recent market conditions.

    So on the strength of past performance you can continue to stay invested. However your need, requirements of your financial goal must be factored in before you decide.

    My point is if you focus on your financial goals and needs, how to diversify investments and what is the net rate of return expected. Then you can be much more specific about your needs and requirements.

  3. sangitha shetty says:

    thanks all. just to let u know…. I dont understand what the term 4 fund represents.
    i invested 40 k in may 2007 when NAV was 133.644 and got 292.722 units.Today this stands at NAV 236.8940 current value rs 69344/-

    so do i let it stay put and invest some more or invest in someother scheme

  4. TheZionView says:

    If it is to cover the 80C for this year and you dont have fresh money its a good option.
    Remember you will be paying STT during redeemption

  5. Ramesh says:

    What exactly is the aim of redeeming and re-investing?

    Is it for tax saving alone? And don’t you have more money to save into the tax saving instruments, that you have to redeem this fund’s money?

    Is it for any other purpose?

  6. Dear Sangitha, please continue with your existing fund.



  7. What you hold is a 4* fund while others are 5* funds as per Value Research. If you look at 1-Y, 3-Y, and 5-Y returns all have fared pretty close to each other.

    A question of this kind will probably invite as many as different answers as responses.

    Personally this is what I would do. Although my fund is a 4* fund,
    I will ask if it has given returns CAGR (annualised returns) is in line with my expectations?
    If yes I see no reason to change.
    As a secondary criterion I will check if it is outperforming its own benchmark (probably is which is why is 4*).
    Yes to both questions will make be feel comfortable with my choice.
    If you are clear about why you are investing and what your expectation in terms of returns are then you will be clear about when to get out and when not to.

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