Investor’s Risk Profile: ELSS does not specify its investment focus in terms of large, medium, small or multi-cap shares, unlike the regular equity funds. However, every ELSS is tilted towards a particular category.
Therefore, an investor should first identify the category of stocks in the portfolio of the ELSS to get an idea about the risk that he would have to bear if he invests. This will ensure that his risk appetite is in line with the scheme’s objectives.
Fund’s Return Profile: Once the investor shortlists a few ELSS on the basis of his risk profile, he should then compare their return profiles to get a better idea of the fund most suited for him.