When a retail investor decides to invest in a mutual fund scheme, one of the key motivations to invest is the annual return it can deliver over a period of time. Although one-year returns do not reveal much about a scheme's potential, the returns over a period of time can help investors determine its investing potential.
For instance, a scheme that has given annualised returns over a period of time, say three or five years, are seen as more investible by retail investors. However, investment experts often suggest that investors should consider factors other than past returns as well.
Here, we shortlist the top performing ELSS funds in the past three years.
What are ELSS funds?
Equity Linked Savings Scheme, or ELSS, are tax-saving mutual funds that offer tax saving option under Section 80C while giving exposure to equity at the same time. These schemes have a 3-year lock-in period, and are a popular choice for long-term investors because of their potential for high returns along with tax savings.
These schemes invest a minimum of 80 per cent of their assets in accordance with Equity Linked Saving Scheme (2005), notified by the Finance ministry.
As on March 31, 2024, there are a total of 42 ELSS schemes in India with net AUM of ₹2.13 lakh crore, reveals the AMFI data. These schemes saw an inflow to the tune of ₹3,876 crore in the month of March alone.
We zero in on a dozen Equity Linked Savings Schemes (ELSS) that delivered over 20 per cent annualised return in the past three years.
The highest returns of 31 per cent were delivered by Quant ELSS Tax Saver Fund followed by 28 per cent CAGR returns given by SBI Long Term Equity Fund, shows the table below.
| ELSS Funds | 3-year-returns (%) (regular) |
| Bandhan ELSS Tax Saver Fund | 22.70 |
| Bank of India ELSS Tax Saver Fund | 24.92 |
| DSP ELSS Tax Saver Fund | 21.29 |
| Franklin India ELSS Tax Saver Fund | 23.45 |
| HDFC ELSS Tax Saver Fund | 26.79 |
| JM ELSS Tax Saver Fund | 22.40 |
| Kotak ELSS Tax Saver Fund | 21.11 |
| Motilal Oswal ELSS Tax Saver Fund | 25.21 |
| Nippon India ELSS Tax Saver Fund | 21.96 |
| Parag Parikh ELSS Tax Saver Fund | 21.76 |
| Quant ELSS Tax Saver Fund | 31.08 |
| SBI Long Term Equity Fund | 28.22 |
(Source: AMFI; returns as on April 19, 2024)
Other ELSS mutual fund schemes which gave more than 25 per cent return are HDFC ELSS Tax Saver Fund (26.79%) and Motilal Oswal ELSS Tax Saver Fund (25.21%).
At the same time, lowest returns were given by Kotak ELSS Tax Saver Fund (21.11%) and DSP ELSS Tax Saver Fund (21.29%).
However, investors must be mindful of the fact that the past returns are only indicative and do not guarantee future potential of high returns. So, it is recommended to examine other factors also such as the reputation of fund house, macro-economic factors and category of scheme and past performance of fund managers, among other factors.
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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First Published:
21 Apr 2024, 10:37 AM IST
Business NewsMutual FundsBest mutual funds: These ELSS schemes gave over 20 per cent annualised returns in past 3 years. Should you invest?
