Should I invest in NFO or existing ELSS?

I have invested ₹40,000 each in Axis Long Term Equity Fund and BSL Tax Relief 96 Fund. I have ₹40,000 in hand to invest. Should I invest this money in a New Fund Offer (NFO) of SBI MF or HDFC MF or choose any other ELSS to save tax and get high returns. Please advise. I am 26 years old.
- Ritu

We do not recommend investing in New Fund Offers (NFOs) from mutual funds. We believe that investing in an existing scheme with a proven performance record is always better than investing in a new scheme that is yet to prove itself. An investor should make an exception to this rule only if the NFO is offering something novel or unique that is not available in the market.

You can stick to Axis Long Term Equity Fund or Birla Sun Life Tax Relief 96. Axis Long Term Equity is a five-star fund and Birla Sun Life Tax Relief 96 is a four-star fund with a proven track record.

This article was originally published on February 10, 2016.