Slew of Tax Saving Funds ELSS NFO’s in recent months.

As all of us know huge number of AMC’s (Asset Mgmt Companies) are out with Tax Saving Funds (ELSS) NFO’s.
The obvious reasons are that Nov-Dec are the months people think about taxes.
As well that the recent run up in the markets have given them even more reasons to cheer and make money out of gullible retail investors.
DSP Merill Lynch
HSBC
Lotus India MF etc.

These are some of the AMC who are under the disguise of offering a complete product range have brought these new funds.

As SEBI has now made it mandatory for fund houses to give a clear reason and purpose of the fund before going for a new fund.
Now the fund managers cannot make a fool of gullible investor by launching a similar fund which it already, has under a fancy new name(much like old wine in new bottle).

DSP Merill Lynch recently have shown a better performamce compared to its past for equity schemes.
HSBC has however very few products to offer and is relatively a new fund house. Not all of its schemes are doing a decent job as far as equity schemes are concerned.
Lotus India has struggled the most of above. Its perhaphs does not even know who are its own fund manager and how long will they stay with the fund house. After a high profile launch and a good team to start the operations. Its has lost its way. I wont be surprised if the current manager quits before the fund completes the mop-up from the market.

Moral of the story is stay away from these NFO and put your precious and hard earned money in safe and time tested schemes like HDFC, SBI, PRINCIPAL etc. who have a longer history or a longer base to start of with.

Also a new investor need not pay high NFO fees which will get ammortised over coming years for these NFO.

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