An Equity-Linked Savings Scheme (ELSS) is a type of mutual fund that provides tax benefits under Section 80C of the Income Tax Act, 1961. By investing in ELSS, individuals can avail tax deductions of up to Rs 1.5 lakh annually. ELSS mutual funds have the potential to generate higher returns compared to other Section 80C investments. These funds come with a mandatory lock-in period of three years, during which at least 80% of the fund’s assets are invested in equities, with the remaining portion allocated to debt instruments. ELSS funds are popular for their ability to provide growth through equity investments while also offering tax savings.
There are various ELSS funds available in the market. In this analysis, we will focus on three specific funds: Tata ELSS Tax Saver Fund, DSP ELSS Tax Saver Fund, and Quant ELSS Tax Saver Fund.
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Tata ELSS Tax Saver Fund: The regular plan of this mutual fund has successfully turned a monthly SIP of Rs 10,000 into a substantial corpus of Rs 1,05,36,692 over a period of 18 years, with an annualised return of 15.65 per cent.
The Tata ELSS Tax Saver Fund Direct-Growth, with assets under management (AUM) totaling Rs 4,680 Crores as of September 30, 2024, is considered a medium-sized fund in its category. The latest Net Asset Value (NAV) of the fund, as of 05/12/2024, stands at Rs 51.58.
With an expense ratio of 0.7%, which is lower than most other ELSS funds, the Tata ELSS Tax Saver Fund Direct-Growth offers a cost-effective investment option.
Over the past year, the fund has delivered impressive returns of 28.67%, while since its launch, it has averaged annual returns of 18.27%. Investors in this fund have witnessed their investments double approximately every 4 years. The fund’s portfolio is primarily invested in sectors such as Financial, Automobile, Technology, Energy, and Construction, with relatively lower exposure to Financial and Automobile sectors compared to its peers.
The top 5 holdings of the Tata ELSS Tax Saver Fund Direct-Growth include HDFC Bank Ltd., ICICI Bank Ltd., Infosys Ltd., Reliance Industries Ltd., and State Bank of India.
DSP ELSS Tax Saver Fund: This fund’s regular plan has seen the Rs 10,000 monthly SIP grow into a corpus of Rs 1,24,10,546, with an annualised return of 17.14 per cent, over the same 18-year period.
DSP ELSS Tax Saver Direct Plan-Growth, offered by DSP Mutual Fund, is an Equity Linked Savings Scheme (ELSS) with assets under management (AUM) amounting to Rs 16,841 crores as of 30/09/2024. The latest Net Asset Value (NAV) stands at Rs 154.67 as of 05/12/2024, with a one-year return of 35.39%. Since its inception, the fund has delivered an average annual return of 19.09% and has doubled the invested amount every 3 years.
The fund predominantly invests in Financial, Healthcare, Energy, Technology, and Automobile sectors, with lesser exposure to Financial and Healthcare sectors compared to other funds in the category. Its top 5 holdings include HDFC Bank Ltd., ICICI Bank Ltd., State Bank of India, Infosys Ltd., and Axis Bank Ltd.
Quant ELSS Tax Saver Fund: Among the three funds, the regular plan of this fund has performed the best, growing the Rs 10,000 monthly SIP into a corpus of Rs 1,29,94,596 with an annualised return of 17.56 per cent in 18 years. Launched in April 2000, this fund has delivered a return of 15.75 per cent since its inception.
The Quant ELSS Tax Saver Fund Direct-Growth holds assets under management (AUM) amounting to Rs 10,980 Crores as of 30/09/2024, positioning it as a medium-sized fund within its category. The most recent Net Asset Value (NAV) for Quant ELSS Tax Saver Fund Direct-Growth, recorded on 05/12/2024, stands at Rs 415.10. With an expense ratio of 0.65%, this fund charges lower fees compared to many other ELSS funds. Over the past year, the fund has generated returns of 23.96%, while delivering an average annual return of 21.91% since its inception. Quant ELSS Tax Saver Fund Direct-Growth has a track record of doubling investors’ money every 4 years.
he fund allocates a significant portion of its investments to the Energy, Consumer Staples, Financial, Healthcare, and Automobile sectors. It maintains lower exposure to the Energy and Consumer Staples sectors in comparison to its peers in the same category. The top 5 holdings of the fund include Reliance Industries Ltd., Samvardhana Motherson International Ltd., JIO Financial Services Ltd., Adani Power Ltd., and Grasim Industries Ltd.