{"id":948,"date":"2024-04-19T05:57:12","date_gmt":"2024-04-19T05:57:12","guid":{"rendered":"https:\/\/jamawealth.com\/askguru\/?p=948"},"modified":"2026-03-02T19:29:32","modified_gmt":"2026-03-02T19:29:32","slug":"what-would-be-the-difference-in-returns-if-i-opted-for-a-mutual-fund-without-close-end-against-the-same-policy-with-3-years-lock-in-period-elss","status":"publish","type":"post","link":"https:\/\/maxiomwealth.com\/askguru\/2024\/04\/19\/what-would-be-the-difference-in-returns-if-i-opted-for-a-mutual-fund-without-close-end-against-the-same-policy-with-3-years-lock-in-period-elss\/","title":{"rendered":"What would be the difference in returns if I opted for a mutual fund without close end against the same policy with 3 years lock in period (elss)?"},"content":{"rendered":"\n

Ideally the difference should be nil; however this depends on the extent of commissions that are front loaded into the respective schemes. Close ended funds tend to be aggressively pushed a lot and hence may carry higher upfront commission.<\/p>\n\n\n\n

Close ended fund (or \u201cSeries\u201d funds) are good for the AMC (no redemption pressure) and the agent\/bank\/distributor as they get commissions.<\/p>\n\n\n\n

The main difference vs an ELSS fund is that the latter is still open ended, as you can redeem anytime after 3 years. Yes there is a 3 year lock in but you also get a substantial tax benefit (as per the income tax slab you fit in).<\/p>\n\n\n\n

A close ended fund tends to get auto redeemed or rolled over into a new scheme that the agent is only too eager to push.<\/p>\n\n\n\n

Two tips in general for mutual fund investing:<\/p>\n\n\n\n

  1. Do not invest in close ended funds. Always go for open ended for flexibility.<\/li>
  2. The new SEBI categorisations apply to open ended funds and not to close ended funds. To avoid confusion and marketing hype, stay away from close ended funds.<\/li>
  3. Always invest in direct plan mutual funds. The commission you save is HUGE over time, upto 40% more. If already invested, switching is fast, paperless and safe. Here<\/a> is how to switch.<\/li><\/ol>\n\n\n\n\n
    \n

    Maxiom Wealth \u2014 Free Tool<\/p>\n

    Is Your Mutual Fund Working Hard Enough?<\/h3>\n

    Two funds with similar star ratings can deliver very different outcomes. Use our fund comparison tool to check if you’re in the right scheme for your risk profile and investment horizon.<\/p>\n Compare Funds \u2192<\/a>\n Talk to a Financial Advisor<\/a>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

    Ideally the difference should be nil; however this depends on the extent of commissions that are front loaded into the respective schemes. Close ended funds tend to be aggressively pushed a lot and hence may carry higher upfront commission. Close ended fund (or \u201cSeries\u201d funds) are good for the AMC (no redemption pressure) and the… Read More »What would be the difference in returns if I opted for a mutual fund without close end against the same policy with 3 years lock in period (elss)?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,66],"tags":[],"class_list":["post-948","post","type-post","status-publish","format-standard","hentry","category-mutual-funds","category-returns-mutual-funds"],"_links":{"self":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/comments?post=948"}],"version-history":[{"count":1,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/948\/revisions"}],"predecessor-version":[{"id":3745,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/948\/revisions\/3745"}],"wp:attachment":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/media?parent=948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/categories?post=948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/tags?post=948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}