List of RGESS eligible mutual funds

Now that RGESS eligible mutual funds are hitting the market, what should you do with all the options that you have – which ones should you choose and which ones should you avoid ?

The temptation to put in money must be huge given the fact that it is being sold as a tax saving instrument. It must be noted that the deduction you get under this is over and above the Sec 80C deductions – so for investments upto Rs 50,000/- in eligible securities, you get more tax deduction which is covered under Section 80CCG.

If you haven’t already read details yet, you can do so by reading the full details on Rajiv Gandhi Equity Savings Scheme.

List of RGESS eligible mutual funds

As far as mutual funds are concerned, ETFs and mutual fund schemes which are designated to be eligible for RGESS can be invested in – not just that, even NFOs will qualify as long as they are made eligible under RGESS. So if you invest in any of these, you can claim the tax deduction.

So let us take a look at the mutual funds which qualify under RGESS.

There are 6 ETFs that I am aware of which are RGESS eligible mutual funds.

KOTAK NIFTY ETF and Kotak Sensex ETF – Kotak Sensex ETF was launched in 2008 and invests in large cap companies. It has returned 6.48% since launch. Kotak Nifty ETF also invests in large cap companies and was launched in 2010 – it has returned around 8.5% since launch.

Quantum Index Fund -Exchange Traded Fund (ETF) – This ETF primarily invests in large cap companies and has returned around 10% since its launch in 2008.

Goldman Sachs S&P CNX Nifty Shariah Index ETF – This is a large cap fund and has given returns of 16.80% since inception which was in 2009.

Goldman Sachs Banking Index Exchange Traded Scheme  – This is an open-ended ETF and invests money in the banking sector. It has returned around 22% since inception which was in the year 2004.

Goldman Sachs Nifty Exchange Traded Scheme  – This is an open-ended ETF that invests mostly in large cap stocks. Returns since inception are 17%  and the MF was launched in 2001.

Goldman Sachs Nifty Junior Exchange Traded Scheme – This is a multi cap ETF that was launched in 2003 and has returned 24% till date.

RGESS eligible mutual funds

RGESS eligible mutual funds as NFOs (New Fund Offers)

Now over and above the ones mentioned above, there are some NFOs (New Fund Offers) which are currently open where you can park your money as well.

UTI Rajiv Gandhi Equity Saving Scheme – NFO
This is benchmarked against S&P CNX Nifty and is a 3 year close ended fund.  This will invest upto 90% – 100% in equity and will keep the rest in cash or cash equivalents. The plans are available both under the regular and direct plans. Subscription closes on March 8th.

SBI Sensex ETF – NFO
SBI Sensex ETS is benchmarked against BSE Sensex.  This is an open ended equity scheme that will invest around 95% – 100% of its corpus in equity while the rest will be in cash. What is not good is that around 1.50% of net daily expenses will be charged as expenses to this MF scheme. Subscription closes on March 8th.

LIC Nomura MF RGESS Series 1 – NFO
Benchmarked against the BSE 100 index, this is a 3 year close ended equity fund. I would not recommend this to investors as LIC Nomura does not really stand out as a great fund house – one has many other options to look at.

IDBI Rajiv Gandhi Equity Saving Scheme – Series I – NFO
This is benchmarked against BSE 100 index and is a 3 year close ended equity mutual fund. This will invest 95% – 100% in equities and the rest in cash. The subscription closes on March 9th. As a mutual fund house, IDBI has not been very impressive so investors might want to stay away from this MF and explore other options.

DSP BlackRock RGESS Fund – Series 1 – NFO
This NFO is also benchmarked against  BSE 100 index and is a 3 year close-ended equity fund. Subscription closes on March 8th. Being from such a good fund house, this NFO is one that investors can seriously consider if they are wishing to invest in a RGESS eligible mutual fund.

Take your pick carefully from the above list of RGESS eligible mutual funds and kindly add the ones that are missing in the comments section. Also be aware that you should invest to save tax only if you are a first time investor in the stock  market, have a DEMAT account and your gross total income is less than Rs 10 lakhs.

Author: Radhey Sharma

Radhey is a Certified Financial Planner and an expert in the disciplines of insurance, retirement, investments and tax. His hobbies include gardening, traveling and reading self development books. The information contained on this blog is general advice and may or may not be suitable to the reader. Kindly take professional help before you apply what you read.

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12 Comments

  1. Sir,
    Thanks for this article. This information was really usefull. By this way, I think intention of government is to increase investments in large cap. NFO will also have some exposure in mid-cap and small-cap but that is not gonna have that much impact which I think will be in large cap.

    Post a Reply
    • The intention of the government is to take our money and use it for its purpose !!!

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  2. Adding to above list:

    HDFC Rajiv Gandhi Equity Savings Scheme
    New Fund Offer of Series 1 – February 2013 Closes On March 8, 2013
    The Scheme offers 4 series having a term/duration of 3 years from the date of allotment of Units.
    For more info:

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  3. Very basic question from someone who is new in ‘Investing’.
    When we say a fund has returned around 8.5% since launch. Does it mean 8.5% returns every year? or is it total 8.5% since launch?

    Post a Reply
    • Yes, Gangadhar it means 8.5% return every year. General term when we say return since inception means, return every year since inception (total since inception would be surely more than that :) ).

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  4. Can I invest Rs 50,000 in more than one rgess eligible Mutual Funds-say Rs 25000 each in two such MFs and get the tax benefits ?

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  5. @Suresh,
    Yes, you can invest any amount in N no of RGESS enabled MFs, Shares, NFOs etc. But only up to 50,ooo Rs is applicable for additional tax benefits.

    Post a Reply
    • Yes Suresh you can.

      Post a Reply
  6. Very useful and handy list. Personally, I feel ETFs would be a better bet as they have been in operation for sometime and have a performance track record, which the NFOs dont.

    Post a Reply

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