Investors still believe that a net asset value ( NAV) of ₹ 10 of a new fund means it is cheaper than existing schemes that have higher NAVs, which is incorrect. Mutual fund units don't work like stocks.

But if you have invested in a recently launched scheme, how do you go about tracking it? In a closed end fund, the person does not have an exit option. In an open ended fund, however, it makes sense if investors wait for a year and evaluate the scheme's performance and then take a call.

Only after a year, can a person gauge the performance of a scheme.An investor first needs to check after three months whether the fund is fully invested or is yet to deploy the money. Ideally, large- cap and equity diversified schemes utilise the money in six weeks to two months. For thematic or small- cap funds, it takes between two and three months, as the universe of such stocks are limited, and investments need to be done in a phased manner.

If a large part ( above 20 per cent) of the corpus is still in cash, the fund manager is either finding it hard to find successful bets or could be timing the market.

In six months, the new fund should be able to give returns at par with the benchmark or beat it. And, after a year, it should be able to also perform better than the category average.

If it's a midcap fund, investors may have to give it more time before forming an opinion. Evaluate the performance for another quarter before taking a call.

While returns are one parameter, investors should also check the portfolio, especially in schemes that are based on themes and mid- cap funds. Many investors are surprised when they see the portfolio and find stocks that do not conform to the theme or see a large- cap company in a midcap fund.

For liquidity, stability, and other reasons, such schemes invest as much as 30 per cent in large caps. And they do mention these details upfront in the scheme information document. However, if they go beyond the specified limit that means the fund manager is not sticking to the mandate.

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

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