Conservative investors, novices should choose passive ELSS funds

Those desiring index-beating returns, but willing to tolerate underperformance, may choose the active plan

The Securities and Exchange Board of India (Sebi) recently allowed asset management companies (AMCs) with an actively managed equity-linked savings scheme (ELSS) to launch a passive ELSS. To do so, they must shut down their existing active scheme.

Most fund houses that have large assets under management (AUM) in their active schemes are unlikely to respond.

One passive ELSS index fund from IIFL AMC, which tracks the Nifty50, exists.

Younger fund houses that are passively inclined may take advantage of this directive to convert their active scheme (acquired when they took over another fund house) into a