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Best 5 ELSS Funds to Invest in

23 Nov 2017 Jitender Singh

Equity linked savings scheme (ELSS) is a type of equity mutual funds on which investments up to Rs1.5 lakh per financial year are tax deductible under section 80C of Income Tax Act, 1961. Moreover, apart from the tax benefits the ELSS investments also offer other benefits as discussed below.

Wealth creation with tax-saving – Historically, it has been seen that ELSS schemes have given significantly higher returns than other tax saving schemes like PPF, 5 years FD, EPF etc.

Shortest Lock-in period – ELSS has lock-in period of 3 years, which is the shortest lock-in period among all tax-saving instruments.

ELSS is a best way to save tax and create wealth in long term. Below are the recommended five ELSS fund.

Scheme Name

AUM (Rs Cr)

1 Y (%)

3 Y (%)

5 Y (%)

Aditya Birla SL Tax Relief '96(G)

6,480

-1.3

13.0

20.1

Axis Long Term Equity Fund(G)

16,467

4.7

11.9

20.7

DSP Tax Saver Fund-Reg(G)

4,329

-4.3

11.9

18.2

IDFC Tax Advt(ELSS) Fund-Reg(G)

1,607

-3.7

12.8

17.6

Reliance Tax Saver (ELSS) Fund(G)

9,496

-17.2

7.3

19.3

1 year returns are absolute; 3 years and 5 year returns are CAGR.
AUM as of October 2018, Returns are as on November 16, 2018
Source: ACE MF

Aditya Birla SL Tax Relief ‘96 Fund

  • Aditya Birla SL Tax Relief ‘96 Fund does tactical allocation between large-cap and mid-cap to ensure optimal risk reward.

  • As on August 31, 2018, the fund had invested ~40% of its AUM in large-cap stocks, ~36% in mid-cap stocks and ~21% in small-cap stocks.

Axis Long Term Equity Fund

  • Axis Long Term Equity Fund invests in companies with sustainable profit growth to generate wealth over 3-4 years.

  • The fund manager follows bottom-up approach to select the companies.

  • As on August 31, 2018, the fund had invested ~70% of its AUM in large-cap stocks, while ~21% in mid-cap stocks.

DSP Tax Saver Fund

  • DSPBR Tax Saver Fund primarily invests in large-cap stocks with some tactical allocation to mid-cap and small-cap stocks to generate higher returns.

  • The fund manager follows buy-and-hold strategy for majority of the portfolio. He also takes active and tactical call to capitalize the market opportunities.

  • As on August 31, 2018, the fund had invested ~69% of its AUM in large-cap stocks, ~13% in Midcap stocks and ~13% in small-cap stocks.

IDFC Tax Advantage (ELSS) Fund

  • IDFC Tax Advantage (ELSS) Fund invests in well-managed growth companies that are available at reasonable value.

  • The scheme invests in companies with sustainable profits.

  • As of August 31, 2018, the fund had invested ~46% of its AUM in large-cap stocks, ~21% in mid-cap stocks and ~26% in small-cap stocks.

Reliance Tax Saver (ELSS) Fund

  • Reliance Tax Saver (ELSS) Fund does tactical allocation between large-cap, mid-cap and small-cap stocks to generate higher returns.

  • The fund invests in potential leaders with high growth prospects.

  • Generally, the fund takes 2-3 sector calls at a time and invests in high conviction Midcap stocks.
  • As of August 31, 2018, the fund has invested ~57% of its AUM in large-cap stocks, ~22% in mid-cap stocks and ~20% in small-cap stocks.

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Best 5 ELSS Funds to Invest in

23 Nov 2017 Jitender Singh

Equity linked savings scheme (ELSS) is a type of equity mutual funds on which investments up to Rs1.5 lakh per financial year are tax deductible under section 80C of Income Tax Act, 1961. Moreover, apart from the tax benefits the ELSS investments also offer other benefits as discussed below.

Wealth creation with tax-saving – Historically, it has been seen that ELSS schemes have given significantly higher returns than other tax saving schemes like PPF, 5 years FD, EPF etc.

Shortest Lock-in period – ELSS has lock-in period of 3 years, which is the shortest lock-in period among all tax-saving instruments.

ELSS is a best way to save tax and create wealth in long term. Below are the recommended five ELSS fund.

Scheme Name

AUM (Rs Cr)

1 Y (%)

3 Y (%)

5 Y (%)

Aditya Birla SL Tax Relief '96(G)

6,480

-1.3

13.0

20.1

Axis Long Term Equity Fund(G)

16,467

4.7

11.9

20.7

DSP Tax Saver Fund-Reg(G)

4,329

-4.3

11.9

18.2

IDFC Tax Advt(ELSS) Fund-Reg(G)

1,607

-3.7

12.8

17.6

Reliance Tax Saver (ELSS) Fund(G)

9,496

-17.2

7.3

19.3

1 year returns are absolute; 3 years and 5 year returns are CAGR.
AUM as of October 2018, Returns are as on November 16, 2018
Source: ACE MF

Aditya Birla SL Tax Relief ‘96 Fund

  • Aditya Birla SL Tax Relief ‘96 Fund does tactical allocation between large-cap and mid-cap to ensure optimal risk reward.

  • As on August 31, 2018, the fund had invested ~40% of its AUM in large-cap stocks, ~36% in mid-cap stocks and ~21% in small-cap stocks.

Axis Long Term Equity Fund

  • Axis Long Term Equity Fund invests in companies with sustainable profit growth to generate wealth over 3-4 years.

  • The fund manager follows bottom-up approach to select the companies.

  • As on August 31, 2018, the fund had invested ~70% of its AUM in large-cap stocks, while ~21% in mid-cap stocks.

DSP Tax Saver Fund

  • DSPBR Tax Saver Fund primarily invests in large-cap stocks with some tactical allocation to mid-cap and small-cap stocks to generate higher returns.

  • The fund manager follows buy-and-hold strategy for majority of the portfolio. He also takes active and tactical call to capitalize the market opportunities.

  • As on August 31, 2018, the fund had invested ~69% of its AUM in large-cap stocks, ~13% in Midcap stocks and ~13% in small-cap stocks.

IDFC Tax Advantage (ELSS) Fund

  • IDFC Tax Advantage (ELSS) Fund invests in well-managed growth companies that are available at reasonable value.

  • The scheme invests in companies with sustainable profits.

  • As of August 31, 2018, the fund had invested ~46% of its AUM in large-cap stocks, ~21% in mid-cap stocks and ~26% in small-cap stocks.

Reliance Tax Saver (ELSS) Fund

  • Reliance Tax Saver (ELSS) Fund does tactical allocation between large-cap, mid-cap and small-cap stocks to generate higher returns.

  • The fund invests in potential leaders with high growth prospects.

  • Generally, the fund takes 2-3 sector calls at a time and invests in high conviction Midcap stocks.
  • As of August 31, 2018, the fund has invested ~57% of its AUM in large-cap stocks, ~22% in mid-cap stocks and ~20% in small-cap stocks.

Research Disclaimer