‘NFO of Parag Parikh Tax Saver Fund can be avoided’

Investors could avoid the new fund offer (NFO) of Parag Parikh Tax Saver Fund as they could look at existing schemes in the category with a track record, said financial planners. The new fund offer of Parag Parikh Tax Saving Fund, which is currently open, closes on July 18.

The scheme will be benchmarked against Nifty 500 TRI. Rajeev Thakkar, Raunak Onkar and Raj Mehta will manage the scheme.

The fund house's only other equity scheme, Parag Parikh Long Term Equity Fund, which has the option to invest up to 35% in overseas markets, has outperformed its benchmarks. In the three-year period, the fund returned 13.71%, while in five years, it has earned 11.86%. It has, however, underperformed in the last one year giving 6.54% against the benchmark's gains of 7.74%.


“Investors should stay away from NFOs unless there is something special not available in the open end fund universe. Opt for funds that have a certain size and track record, ”says Jignesh Shah, Founder, Capital Advisors.

In tax-saving Equity Linked Savings Schemes, investors can get tax benefits up to ₹1.5 lakh under Section 80C of the Income Tax Act, with a lock-in period of three years.