Top 5 ELSS Funds to Invest in 2022

elss-funds-2022

Mutual Funds
by 5paisa Research Team Last Updated: 2022-03-25T12:48:11+05:30

Equity Linked Savings Schemes are one of the best investment options available in the market today. From beginners to expert investors, all of us can invest in ELSS mutual funds to save tax and grow our money without too many worries.

Rather than investing directly in shares and stocks, you can choose the ELSS option to keep your efforts lighter and money somewhat safer. You also do not have to worry about tracking shares every minute and waiting for the right time to buy or sell them.

Investing in ELSS funds is no doubt a lucrative option for an investor. But knowing where to put your money is very important in this regard. Depending on the rate of returns, lock-in period, and other relevant factors, you must choose the best ELSS fund to invest in.
 

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But before going through the most suitable ELSS funds in 2022, we must be clear on what ELSS funds are and why you should consider investing in them.


What Are ELSS Mutual Funds?


Equity Linked Savings Schemes are tax saving mutual funds that can be declared and claimed under Section 80C of the Income Tax Act. You can claim a maximum of 1.5 lakh INR in ELSS and also claim tax deductions on your investments.

These funds work by investing your money diversely in equity and equity-linked instruments or stocks. They have a high-risk factor, which you must be aware of before investing your money. Unlike Public Provident Fund or recurring deposit accounts, ELSS does not provide guaranteed returns.

However, ELSS mutual funds are one of the best tax saving options to grow your money.


Why Should You Invest in ELSS Funds?


ELSS funds have high return potential, thus you stand a chance to gain much higher returns on your money than traditional savings channels. When you invest in stocks through mutual funds for a long period of time, you are almost assured of getting high returns.

On an average, ELSS schemes offer a return of around 15 per cent over 10 years. This is a significant amount compared to most other investment options. This is why it is advisable for beginners and seasoned investors to opt for ELSS funds.

1) You get dual benefits of wealth accumulation and tax relief.
2) It has a short lock-in period of three years, which is the shortest among all tax-saving investment options.
3) It has the potential of giving the highest returns among 80C investments.
4) You can invest a small amount every month by choosing SIP (Systematic Investment Plan).
5) An ELSS portfolio typically consists of equities as well as fixed-income securities.

If you plan on investing for a longer time period, ELSS is undoubtedly one of the most profitable options.


Top 5 ELSS Funds in 2022


Here is our pick of the top five ELSS funds to invest your money in 2022


Mirae Asset Tax Saver Fund


Mirae Asset Tax Saver Fund Direct-Growth is an ELSS scheme that was started in November 2015. It has around 10,972 crores INR worth of assets under management, as reported in December 2021. This medium-sized fund has an expense ratio of 0.41 per cent, which is less than many other ELSS funds.
 

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1) Mirae Asset Tax Saver Fund has delivered returns of 19.51 per cent in the last year.
2) It has doubled the investment every two years and has delivered 21.76 per cent average annual returns since inception.
3) Its loss control ability is above-average in the market.
4) Most of its funds are invested in energy, construction, finance, technology, and automobile sectors.
5) Its net asset value (NAV) is 33.51 INR as of February 16, 2022.


Quant Tax Plan


Quant Tax Plan Direct-Growth was launched in January 2013 and had about 789 crores INR worth of assets, as of December 2021. It is a small fund in its category with an expense ratio of 0.57 per cent.

1) Its returns from last year were 50.70 per cent.
2) It has delivered average annual returns of 21.86 per cent since launch and doubled its investment every two years.
3) It has a high loss control capability.
4) Most of its money is invested in finance, FMCG, metals, services, and construction sectors.
5) Its NAV is 237.3 INR as of February 16, 2022.

Canara Robeco Equity Tax Saver Fund

Canara Robeco Equity Tax Saver Direct-Growth was launched in January 2013 and had over 3,209 crores INR worth of assets, as of December 2021. It is a medium-sized fund with an expense ratio of 0.74%.

1) It provided returns of 17.98 per cent last year.
2) Its average annual returns are 16.67 per cent and it has double the money invested in it every two years.
3) Its loss control ability is above average in a falling market.
4) Most of its investment is in the financial, automobile, energy, construction, and technology sectors.
5) Its NAV is 122.91 INR as of February 16, 2022.


DSP Tax Saver Fund


DSP Tax Saver Direct Plan-Growth was launched in January 2013 and had over 9,856 crores INR worth of assets as of December 2021. It has an expense ratio of 0.87 per cent and is a medium-sized fund in its category.

1) Its returns from last year were 22.40 per cent.
2) It has offered an average annual return of 17.89 per cent since inception.
3) It has doubled its money in two years, with an above-average ability to control losses.
4) Its funds are invested in energy, healthcare, finance, technology, and construction sectors.
5) Its NAV on February 16, 2020, was 86.4 INR.


PGIM India ELSS Tax Saver Fund


PGIM India ELSS Tax Saver Fund Direct-Growth was launched in October 2015 and had around 353 crores INR worth of assets as of December 2021. This medium-sized fund has an expense ratio of 1 per cent, which is at par with other ELSS funds.

1) Its returns from last year were 26.65 per cent.
2) It has delivered an average annual return percentage of 16.52 since inception. 
3) Its capability to control losses in a falling market is above-average, and it has doubled its investment every two years.
4) Most of its funds are invested in the financial, technology, healthcare, construction, and energy sectors.
5) Its NAV was 25.76 INR on February 16, 2022.
 

Fund Name

Net Asset Value INR (Feb 16, 2022)

Returns in the last year (%)

Annual Average Returns (%)

Mirae Asset Tax Saver Fund

33.51

19.51

21.76

Quant Tax Plan

237.3

50.70

21.86

Canara Robeco Equity Tax Saver Fund

122.91

17.98

16.67

DSP Tax Saver Fund

86.4

22.40

17.89

PGIM India ELSS Tax Saver Fund

25.76

26.65

16.52

 

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Choose an ELSS Fund and Invest!

An ELSS fund, while possessing risks, gives you one of the best chances to grow your money and get high returns quickly. If you are looking for a long-term investment opportunity that can withstand market conditions, choose the most suitable ELSS fund and start investing now!

Also Read:-

Top 5 index funds in India

Top 5 performing Mutual Funds

Top 5 Flexi cap funds in India

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