What is the difference between diversified equity scheme and ELSS? Which one is more secure and profitable?
Vipul Sharma, Delhi
Diversified equity schemes and ELSS are equity schemes and both diversify across stocks and sectors. The only difference between a diversified equity scheme and an ELSS is that the latter offers tax benefits under Section 80C and comes with a three-year lock-in. Diversified equity funds on the other hand do not offer any such tax benefits. There is no proven better category. When investing in mutual funds you should look at the funds’ past performance and evaluate your investment based on your needs and how the fund will help you achieve your financial goal.