scorecardresearchThese ELSS funds gave as high as 33 percent return in past three years;

These ELSS funds gave as high as 33 percent return in past three years; Should you invest?

Updated: 01 Jun 2022, 07:35 AM IST
TL;DR.

As equity linked savings schemes are set to be launched via passive funds, we list out the returns of some of the high performing schemes in the past few years

SEBI recently announced that mutual fund houses can launch passive ELSS schemes as well.

SEBI recently announced that mutual fund houses can launch passive ELSS schemes as well.

There is a barrage of advantages of investing in the equity linked savings schemes (ELSS). First and foremost, you stand to get tax savings, and importantly – you get exposure to equity, effectively enabling you to earn a higher return vis-à-vis fixed income-instruments. And on the top of it, the lock-in period is only of three years, which is the shortest among all tax-saving investments.

In a recently-released circular, capital markets regulator SEBI announced that mutual fund houses will be able to launch passive ELSS schemes as well, apart from the existing active ones. However, there is one cap that has been placed which prohibits the fund houses from launching both the ELSS types i.e., active and passive.

This move was widely appreciated by the industry insiders who asserted that this would offer cost-effective, tax-saving alternative to investors.

If we talk about the past three year returns, the ELSS funds have given a return of 9-18 percent, while one has delivered an exceptionally high return of 33 percent, according to the AMFI (Association of Mutual Funds in India) data as on May 31, 2022.

Here, we list out some of the popular funds and their past three-year returns:

Axis Long Term Equity Fund gave a return of 11.44 percent, Baroda BNP Paribas ELSS Fund gave 12.94 percent, BOI AXA Tax Advantage Fund gave 21.31 percent, Canara Robeco Equity Tax Saver Fund gave a return of 18.00 percent while Quant Tax Plan gave a return of 33.51 percent.

However, it will be incorrect to say that all the ELSS schemes performed exceptionally well. A few of them delivered single digit returns as well. Aditya Birla Sun Life Tax Relief 96 Fund gave 7.73 percent return in the past three years, and Nippon India Tax Saver (ELSS) Fund delivered 9.31 percent return.

ELSS Scheme                                          3-year-returns (%)
Quant Tax Plan                                                        33.51
BOI AXA Tax Advantage Fund                             21.31
Canara Robeco Equity Tax Saver Fund                  18
Baroda BNP Paribas ELSS Fund                               12.94
Axis Long Term Equity Fund                                    11.44
Nippon India Tax Saver (ELSS)                               9.31
Aditya Birla Sun Life Tax Relief                            7.73

(Source: AMFI data; direct returns as on May 31, 2022)

Five-year-returns

If we talk about the five-year returns, the average returns go as high as 23 percent. For other ELSS schemes, the annual returns range between 8-16 percent.

Sample this. Edelweiss Long Term Equity Fund (Tax Savings) delivered 10.94 percent return, Franklin India Taxshield Fund gave 11.12 percent return, ICICI Prudential Long Term Equity Fund (Tax Saving) gave 12.78 percent return, IDFC Tax Advantage (ELSS) Fund gave 14.93 percent return and Kotak Tax Saver Fund gave 13.19 percent return.

ELSS Schemes                                        Five-year-returns (%)
Quant Tax Plan                                              23.06
Kotak Tax Saver Fund                                13.19
Edelweiss Long Term Equity Fund               10.94
Nippon India Tax Saver (ELSS) Fund           5.98

(Source: AMFI data, direct returns as on May 30, 2022)

 

The highest returns were posted by Quant Tax Plan at 23.06 percent. Whereas, there were some schemes that gave single digit returns such as 9.01 percent by L&T Tax Advantage Fund and 5.98 percent by Nippon India Tax Saver (ELSS) Fund.

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First Published: 01 Jun 2022, 07:35 AM IST