Passive ELSS Mutual Funds

Passive ELSS Funds are a type of mutual fund that offers both tax benefits and market-linked returns by passively tracking an index like the Nifty 50 or Sensex. Unlike active funds, Passive ELSS Mutual Funds do not rely on a fund manager to pick stocks. Instead, they simply mirror the performance of the chosen index, which helps reduce costs.
These funds come with a three-year lock-in period and qualify for tax deductions under Section 80C, making them one of the best tax saving mutual funds for long-term investors seeking low-cost, diversified exposure to equity markets with the added benefit of tax savings.

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List of Passive ELSS Mutual Funds

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Search Result - 3 Mutual Funds

Fund Name	Fund Size (Cr.)	3Y Returns	5Y Returns
360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth Other Passive ELSS	76	-	-	Invest
Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth Other Passive ELSS	67	-	-	Invest
Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth Other Passive ELSS	123	-	-	Invest

Fund Name	1Y Returns	Rating	Fund Size (Cr.)
360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth Other Passive ELSS	7.27% Fund Size (Cr.) - 76 Invest
Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth Other Passive ELSS	7.35% Fund Size (Cr.) - 67 Invest
Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth Other Passive ELSS	5.45% Fund Size (Cr.) - 123 Invest

Fund Name

1Y Returns

Rating

Fund Size (Cr.)

360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

Other
Passive ELSS

7.27%

Fund Size (Cr.) - 76

Invest

Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

Other
Passive ELSS

7.35%

Fund Size (Cr.) - 67

Invest

Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth

Other
Passive ELSS

5.45%

Fund Size (Cr.) - 123

Invest

What are Passive ELSS Mutual Funds?

A Passive ELSS Fund is a type of tax-saving mutual fund that follows a specific market index, such as the Nifty 50 or Sensex. Instead of actively picking stocks, these funds invest in the same companies as the index, aiming to match its overall performance. The main idea behind Passive ELSS Mutual Funds is to offer investors a straightforward, low-cost way to grow their money while benefiting from tax savings under Section 80C. With a mandatory lock-in period of three years, these funds are well suited for those who want steady, long-term exposure to equities through a diversified and disciplined approach. They tend to carry moderate risk because of their broad market exposure, making them a good option for conservative investors focused on tax-efficient investing.

How do Passive ELSS Mutual Funds Work?

Passive ELSS Mutual Funds are built to offer tax savings along with the potential for market-linked returns, using a low-cost, index-based approach. When you invest in these funds, your money is pooled and allocated to stocks that form part of a benchmark index like the Nifty 50 or Sensex. Unlike actively managed ELSS funds, these are not run by fund managers picking stocks, they simply aim to mirror the index’s performance. Here’s how Passive ELSS Mutual Funds work:

1. Investors put money into a fund that tracks a benchmark index
2. The fund invests in the same stocks and in the same proportion as the index
3. There is a mandatory lock-in of three years for each investment
4. These funds are not actively managed, keeping costs lower
5. Eligible for tax deduction under Section 80C, up to ₹1.5 lakh per year

Types of Passive ELSS Mutual Funds

1. Index-Based Passive ELSS: Tracks broad indices like Nifty 50 or Sensex, offering diversified exposure to large-cap stocks.
2. Sectoral and Thematic Passive ELSS: Focuses on specific sectors (like IT or Pharma) or themes (like ESG), suitable for investors with a strong view on a particular segment.
3. Factor-Based Passive ELSS: Uses smart beta strategies based on factors like value, momentum, or low volatility.
4. Multicap Passive ELSS: Spreads investments across large-cap, mid-cap, and small-cap indices for broader market exposure.

Features and Benefits of Passive ELSS Mutual Funds

1. Index Tracking: They follow a well-known index, think Nifty 50 or Sensex so you get a slice of all the big players in the market, rather than betting on a few stocks.
2. Cost-Friendly: Without a team of stock-pickers actively managing the fund, the fees tend to be lower. That means more of your money stays invested instead of going toward expenses.
3. Clear and Simple: Because they mirror an index, you can easily track where your money is and understand what’s driving your returns.
4. Tax Savings: Just like their active funds, passive ELSS funds qualify for tax breaks under Section 80C, up to ₹1.5 lakh every year.
5. Expense Ratio Edge: Over time, those lower fees can really add up, making passive ELSS more cost-efficient compared to active funds.

Who Should Invest in Passive ELSS Mutual Funds?

1. Long-Term Investors: Individuals looking to build wealth over time through equity exposure and willing to stay invested for at least three years, may consider investing in ELSS Passive Funds.
2. Cost-Conscious Investors: Investors who prefer low-cost funds with minimal management fees, benefiting from the lower expense ratios of ELSS passive funds.
3. Risk-Averse Equity Investors: People who want diversified exposure across a broad market index to lower individual stock risk but still seek equity returns.
4. New Investors to Equity Markets: Beginners who want a simple, transparent investment option that mirrors the market without the complexity of active stock selection.

How to Invest in Passive ELSS Mutual Funds?

Investing in Passive ELSS Mutual Funds is simple and can be done easily through platforms like 5paisa. Here’s how to get started:

1. Select the Right Passive ELSS Fund: Choose a fund that tracks a well-known index and fits your risk profile. Compare details like expense ratio and past returns.
2. Complete Your KYC: Make sure your KYC (Know Your Customer) is updated, as it’s mandatory for mutual fund investments.
3. Decide on Investment Mode: Opt for a Systematic Investment Plan (SIP) for regular investing or a lump sum if you have a specific amount.
4. Use 5paisa to Invest: 5paisa offers a user-friendly platform to invest in ELSS Passive funds easily, with quick access to fund details and portfolio tracking.
5. Monitor Your Investment: Keep an eye on your fund’s performance periodically to ensure it aligns with your financial goals.

Factors to Consider While Investing in Passive ELSS Mutual Funds

1. Index Tracked: Understand which market index the fund follows, such as Nifty 50 or Sensex, to gauge the kind of stocks and sectors your money will be exposed to.
2. Expense Ratio: Check the fund’s expense ratio, as these costs can significantly impact your net returns over time.
3. Past Performance: While passive funds track an index, reviewing historical returns can help confirm consistency and reliability.
4. Risk Profile: Assess your risk tolerance; although passive ELSS funds are diversified, equity investments carry market risks.
5. Fund House Reputation: Choose funds from trusted asset management companies for better service and transparency.

Tax Rules For Passive ELSS Mutual Funds

1. Tax Deduction Under Section 80C: You can claim a tax deduction of up to ₹1.5 lakh per financial year on your investment amount, reducing your taxable income. This is the main Passive ELSS tax benefit.
2. Mandatory Lock-in Period: There is a compulsory lock-in of three years, meaning you cannot redeem your investment before this period.
3. Long-Term Capital Gains Tax: Upon redemption after the lock-in, gains exceeding ₹1.25 lakh in a financial year are taxed at 12.5% as LTCG.
4. Balanced Tax Advantage: While you save taxes upfront through deductions, it’s important to plan for taxes on gains post-redemption. This will help in making the most of Passive ELSS Mutual Fund Tax Benefit.

Risks Involved When Investing in Passive ELSS Funds

1. Tracking Error: Sometimes the fund’s returns don’t exactly match the index because of costs or how stocks are selected, which can cause small differences in performance.
2. Limited Flexibility: Since the fund follows a fixed index, managers can’t actively change the portfolio to avoid weaker stocks or respond to market changes.
3. Market Risk: Like all equity investments, Passive ELSS Investment funds are affected by stock market ups and downs, which can impact your returns.
4. Lock-in Restriction: The mandatory three-year lock-in means your money is locked in and can’t be withdrawn early, even if the market drops.

Popular Passive ELSS Mutual Funds

Fund Name
Min Investment Amt
AUM
3Y Returns

360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

-

₹ 760

-

Min SIP Investment Amt

₹ -

AUM (Cr.)

₹ 76

3Y Return

-

Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

₹ 500

₹ 670

-

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 67

3Y Return

-

Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth

₹ 500

₹ 1230

-

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 123

3Y Return

-

FAQs

Passive ELSS Mutual Funds

Kickstart your SIP journey with just ₹100!

List of Passive ELSS Mutual Funds

Category

Sub Category

Rating

What are Passive ELSS Mutual Funds?

How do Passive ELSS Mutual Funds Work?

Types of Passive ELSS Mutual Funds

Features and Benefits of Passive ELSS Mutual Funds

Who Should Invest in Passive ELSS Mutual Funds?

How to Invest in Passive ELSS Mutual Funds?

Factors to Consider While Investing in Passive ELSS Mutual Funds

Tax Rules For Passive ELSS Mutual Funds

Risks Involved When Investing in Passive ELSS Funds

Popular Passive ELSS Mutual Funds

360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

-

₹ 760

-

Min SIP Investment Amt

₹ -

AUM (Cr.)

₹ 76

3Y Return

-

Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

₹ 500

₹ 670

-

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 67

3Y Return

-

Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth

₹ 500

₹ 1230

-

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 123

3Y Return

-

Other Calculators

FAQs

How are Passive ELSS Mutual Funds Taxed?

What is the Risk Rating of Passive ELSS Mutual Funds?

Who Are Passive ELSS Mutual Funds Suited For?

What is the Lock-In for Passive ELSS Mutual Funds?

Open Free Demat Account

Passive ELSS Mutual Funds

Kickstart your SIP journey with just ₹100!

List of Passive ELSS Mutual Funds

Category

Sub Category

Rating

What are Passive ELSS Mutual Funds?

How do Passive ELSS Mutual Funds Work?

Types of Passive ELSS Mutual Funds

Features and Benefits of Passive ELSS Mutual Funds

Who Should Invest in Passive ELSS Mutual Funds?

How to Invest in Passive ELSS Mutual Funds?

Factors to Consider While Investing in Passive ELSS Mutual Funds

Tax Rules For Passive ELSS Mutual Funds

Risks Involved When Investing in Passive ELSS Funds

Popular Passive ELSS Mutual Funds

360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth - ₹ 760 - Min SIP Investment Amt ₹ - AUM (Cr.) ₹ 76 3Y Return -

Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth ₹ 500 ₹ 670 - Min SIP Investment Amt ₹ ₹ 500 AUM (Cr.) ₹ 67 3Y Return -

Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth ₹ 500 ₹ 1230 - Min SIP Investment Amt ₹ ₹ 500 AUM (Cr.) ₹ 123 3Y Return -

Other Calculators

FAQs

How are Passive ELSS Mutual Funds Taxed?

What is the Risk Rating of Passive ELSS Mutual Funds?

Who Are Passive ELSS Mutual Funds Suited For?

What is the Lock-In for Passive ELSS Mutual Funds?

Open Free Demat Account

360 ONE ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

-

₹ 760

-

Min SIP Investment Amt

₹ -

AUM (Cr.)

₹ 76

3Y Return

-

Navi ELSS Tax Saver Nifty 50 Index Fund-Dir Growth

₹ 500

₹ 670

-

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 67

3Y Return

-

Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund-Direct Growth

₹ 500

₹ 1230

-

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 123

3Y Return

-