NJ Mutual Fund announced the launch of the NJ ELSS Tax Saver Scheme, an open-ended ELSS equity scheme tracking the Nifty 500 TRI Index constituents.
The scheme opened for public subscription on March 13, 2023, and will close on June 09, 2023, and will re-open for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This kind of open-ended ELSS equity scheme with a statutory lock-in period of three years and tax benefits. The AMC/mutual fund house will disclose the portfolio of the scheme as on the last day of the month/half year on its website and AMFI within 10 days from the close of each month/ half year (i.e., March 31 and September 30), respectively. The product is apt for investors seeking long-term wealth creation solutions while saving on taxes only.
Q. What is the main objective of investing in this fund?
The scheme’s investment objective is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related instruments. However, there is no assurance or guarantee that the scheme’s investment objective will be achieved.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum lump sum investment of ₹500 per plan/option and in multiples of ₹500. Additional purchases of ₹500 and in multiples of ₹500. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
|Instruments||Indicative allocations (% of total assets)||Risk Profile|
|Equity & Equity related instruments||80%||100%||Medium to High|
|Debt and money market instruments||0%||20%||Low to Medium|
Q. Are there similar mutual funds in the market?
To date, many asset management companies have launched ETFs, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
|Name of the fund|
Three-year returns (in %)
Five-year returns (in %)
|Quant Tax Plan||42.68||22.83|
|IDFC Tax Advantage (ELSS) Fund||27.77||13.29|
|PGIM India ELSS Tax Saver Fund||24.92||14.00|
|HDFC Tax Saver Fund||23.58||10.25|
|Bank of India Tax Advantage Fund||23.08||13.90|
Q. How will the scheme benchmark its performance?
The Board adopted benchmarks for comparing the performance of the scheme as the Nifty 500 TRI Index. Since the composition of the Index is most suited for comparing the performance of the scheme. It will also enable the investors to arrive at a more informed judgement on scheme performances.
The benchmark of the scheme may be updated in terms of SEBI Regulations, circulars, and directives issued from time to time.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” will also be “Nil”.
Further, the trustees shall have a right to modify the load structure with prospective effect subject to a maximum prescribed under the regulations.
Q. Who will manage this scheme?
Viral Shah will be the fund manager for the scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their investment will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product suits them.