Lotus India AMC has launched Lotus India Tax Plan, an open-ended equity linked savings scheme. This is the maiden equity offering from Lotus India AMC. The investment objective of the Scheme is to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities.
Being an ELSS, it offers deduction under Sec. 80C and the minimum lock-in period would be three years. This enforced lock-in offers the opportunity to the fund manager to take long-term calls without having to worry about creating liquidity for daily redemptions.
Investing in ELSS
Experts believe that an ELSS can be a good investment option as it provides investors with a very simple way of investing in stock market and save taxes while doing so.
Advisor Hemant Rustagi says, "Considering that stock markets are doing well and showing signs of continued good run, these schemes merit a serious consideration. ELSS has the potential to provide better returns compared to all other options under section 80C. Another notable feature is the tax efficiency of the returns earned from them."
Lotus India Tax Plan v/s Existing ELSS
Given the pedigree of its sponsor Temasek and Sabre Capital, and Lotus India Tax Plan being their flagship equity scheme, experts expect Lotus to do a good job. However, they warn: "This being the first equity product from Lotus AMC, there is no track record to go by, while there are some existing ELSS that have been doing very well."
Investment expert Sandeep Shanbhag believes, "The pedigree of its sponsor Temasek and Sabre Capital augurs well for the fund. The fund manager has the mandate to invest across market cap, and ELSS coming with a 3-year lock-in offers investors the opportunity to benefit from the fund management potential of Lotus. Hence, the coming few months will show-case the performance potential of the fund house."
Conclusion:
That being said, experts feel that conservative investors for now can go along with an existing well performing scheme and invest in Lotus Tax Plan next year depending upon its performance.
