Union ELSS Mutual Fund

Investment Objective of Union ELSS Mutual Fund

Diversified equity funds like the Union MF ELSS Funds are designed to give investors a chance to accumulate wealth over time. According to the fund’s mandate, the fund’s primary investments are in equities and equity-related derivatives in a specific proportion. After doing thorough research, the concerned manager will choose high-quality equities to guarantee that the returns of the concerned portfolio continue to meet expectations. The period of lock-in for these funds is three years. A tax deduction of up to INR 1.5 lakh is available to you under Section 80C of the Income Tax Act when you invest in Union MF ELSS Funds. Your investment is then deducted from the taxable income in this case. The full and final tax obligation is then reduced.

Risks Involved in Union ELSS Mutual Fund

In comparison to debt funds and balanced funds, Union MF ELSS Funds have a fairly high to extremely high level of market risk. The value of the fund may change whenever the price of the concerned stock does. Continuous ups and downs in the stock market’s volume and price, interest rates, currency rates, governmental policies, tax regulations, and several other economic developments could all have an impact on stock values. Union ELSS Mutual Funds are much less risky than small and midcap funds, theme and sector based funds because of their well-diversified portfolios. Moreover, if you invest over extended periods of time, the risks might scale out. Before investing in the plan, investors may take into account their individual risk appetite.

Return Potential of Union ELSS Mutual Fund

Purchasing Union MF shares You receive returns from ELSS Funds in the form of consistent dividend payments and capital growth. An increase in the prices of the concerned stocks over a specific investing horizon leads to capital appreciation. The three-year period of lock-in enables the fund management to decide on asset allocation without worrying about recurrent fund redemptions. Long-term returns might be higher as a result of this comprehensive strategy. ELSS funds have been known to produce returns that range from 12% to 15% on average for longer than 5 years. Union MF ELSS funds, on the other hand, do not promise guaranteed returns, and their performance may change over time. An active investor can think about including some small or midcap funds in the total portfolio to increase returns.

Who Should Invest in Union ELSS Mutual Fund?

For investors who all take on risk, Union MF ELSS Funds are the best option. Comparing these funds to some other options for tax savings, their three-year lock-in term is the shortest. They are therefore perfect for long-term, tax-efficient wealth growth. To accomplish long-term objectives like funding a child’s education, saving for retirement, or purchasing a home, investors should invest in Union MF ELSS Funds. You must maintain your investment throughout the period of lock-in in order to realise the full potential of the concerned funds. This could also mean keeping only those surpluses in the respective accounts that you won’t need anytime soon.

Things To Consider Before Investing in Union ELSS Mutual Fund

Investors who are looking for long-term financial growth over a period of five years or more, Union ELSS Mutual Fund, an excellent choice. These funds are intended for investors with a comparatively higher risk tolerance because the value of the fund could increase or decrease depending on market conditions. Union ELSS Mutual Funds are the ideal choice for achieving long-term objectives, such as paying for a child’s education, saving for retirement, and purchasing a home, due to their high return producing potential. You must hold onto your investment for the specified investment horizon, which is often 10–12 years or longer, in order to fully realise the potential of equity funds.

Tax on Union ELSS Mutual Fund

If you redeem before one year, returns are subject to a 15% tax. After a year, you must pay 10% LTCG tax on returns of Rs. 1 lakh or more in a fiscal year.