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Investment in these ELSS mutual funds grew by 2.5 times in past 5 years. Do you own any?

Quant ELSS Tax Saver Fund delivered 32.02 percent annualised return in the past five years, Motilal Oswal ELSS Tax Saver Fund gave a CAGR return of 24.14 percent, while Bank of India ELSS Tax Saver Fund gave an annualised return of 25.87 percent.

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If you stay invested in a mutual fund for a long period of time, the returns tend to grow multifold for what is known as ‘compounding’. The gains earned in the first few years are added to the corpus, thus making it grow considerably over a period of time.

Here, we share the list of ELSS funds, which have given over 20 percent return in the past five years. When a mutual fund scheme delivers an annualised return of 20 percent over a five-year period, the corpus of ₹one lakh appreciates to ₹2.48 lakh at the end of five years.

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But before moving forward, let us understand what exactly are ELSS funds?

What are ELSS funds?

Equity linked savings schemes invest at least 80 per cent in stocks in accordance with Equity Linked Saving Scheme, 2005. These funds have a lock-in period of three years. These schemes are eligible for tax deduction under Sec 80C of the I-T Act up to a maximum cap of ₹1,50,000.

There are 42 schemes under the category of ELSS with total AUMs amounting to ₹2.57 lakh crore, reveals the AMFI data as on Sept 30, 2024.

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As we can see in the table below, the top-performing ELSS schemes have delivered anywhere between 20-32 percent annualised return. This means if someone has invested ₹one lakh in a scheme five years ago, it would have swelled to ₹2.48 lakh over a period of five years. At an annualised rate of 32 percent, an investment of ₹1 lakh grows to ₹4 lakh in five years.

Quant ELSS Tax Saver Fund delivered 32.02 percent annualised return over five years, Motilal Oswal ELSS Tax Saver Fund gave a CAGR return of 24.14 percent, while Bank of India ELSS Tax Saver Fund gave an annualised return of 25.87 percent.

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ELSS Funds5-year-return (%)   AUM ( ₹crore)
Bandhan ELSS Tax Saver Fund                              22.93   6,902.09
Bank of India ELSS Tax Saver Fund                   25.87   1,436.59
Canara Robeco ELSS Tax Saver                            21.14   8,891.65 
DSP ELSS Tax Saver Fund                               22.04     17,105.36
Franklin India ELSS Tax Saver Fund                       20.73   6,920.27
HDFC ELSS Tax Saver Fund                           21.20   16,135.23
JM ELSS Tax Saver Fund                            22.39     180.43
Kotak ELSS Tax Saver Fund                            20.80     6,266.20
Mirae Asset ELSS Tax Saver Fund                             20.61    25,407.54
Motilal Oswal ELSS Tax Saver Fund                    24.14    4,184.36
Parag Parikh ELSS Tax Saver Fund                     23.09   4,348.12
SBI Long Term Equity Fund                                   24.83     28,001.86
Quant ELSS Tax Saver Fund                           32.02      10,937.48

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It is noteworthy that the historical returns, although are indicative, do not guarantee future returns. In other words, just because a scheme has performed exceptionally well in the recent past doesnt mean it will continue to perform at the same pace in future as well.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.

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