ELSS schemes invest a minimum of 80 per cent in stocks in accordance with Equity Linked Saving Scheme, 2005. These schemes have a lock-in period of three years (which is shortest amongst all other tax saving options).
Prior to investing in a mutual fund scheme, investors tend to evaluate the past returns of the scheme and compare them with other schemes in the same category.
Although this is not the right investing advice to follow, it is still quite common among retail investors.
Here we list out the top performance of ELSS funds which yielded over 20 percent return in the past 5 years.
To put this rate of return in the context, let us take a look at the past returns of the broader benchmark indices last year. In the calendar year 2023, Nifty50 gave a return of 20 percent and Sensex grew by 18.74 percent.
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ELSS mutual funds
Equity linked savings schemes (ELSS) invest at least 80 per cent in stocks in accordance with Equity Linked Saving Scheme, 2005, notified by the Ministry of Finance. These schemes have a lock-in period of three years (which is shortest amongst all other tax saving options).
These schemes are eligible for deduction under Sec 80C of the Income Tax Act upto ₹1,50,000 just as other investment options of PPF, LIC, Sukanya Samridhi Yojana and National Savings Certificate (NSC).
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Here we list out the past five-year returns of ELSS schemes:
| ELSS Funds | 5-year-return (%) |
| Bandhan ELSS Tax Saver Fund | 22.50 |
| Bank of India ELSS Tax Saver Fund | 28.69 |
| Canara Robeco ELSS Tax Saver | 21.31 |
| DSP ELSS Tax Saver Fund | 22.97 |
| Franklin India ELSS Tax Saver Fund | 20.78 |
| HDFC ELSS Tax Saver Fund | 21.00 |
| JM ELSS Tax Saver Fund | 24.08 |
| Kotak ELSS Tax Saver Fund | 21.62 |
| Mahindra Manulife ELSS Tax Saver Fund | 20.17 |
| Mirae Asset ELSS Tax Saver Fund | 21.61 |
| Motilal Oswal ELSS Tax Saver Fund | 24.01 |
| SBI Long Term Equity Fund | 25.07 |
| Union ELSS Tax Saver Fund | 21.41 |
(Source: AMFI; returns as on July 12, 2024; names written alphabetically)
As we can see in the table above, the highest return of 28.69 per cent was given by Bank of India ELSS Tax Saver Fund followed by SBI Long Term Equity Fund which gave 25.07 percent.
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Other mutual fund schemes which gave higher than 24 percent included JM ELSS Tax Saver Fund (24.08%) and Motilal Oswal ELSS Tax Saver Fund (24.01%).
It is noteworthy to mention that investors should look beyond the past returns of a scheme and gauge other factors such as the reputation of the fund house, macro-economic factors which influence the future returns and future expectations from the category and sector that the scheme belongs to.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
