Table of Contents
Why ELSS Over Other Tax Saving Investments
ELSS funds also known as Equity Linked Savings Scheme is an equity-diversified tax saving Mutual Fund that majorly invests its assets in equities or equity-linked instruments like stock markets. The ELSS Mutual Funds offer Market-linked returns, which are volatile and are dependent on the market conditions. However, financial advisors suggest Investing in ELSS funds for a long duration, as these ELSS Mutual funds generate best returns when invested for a longer duration. In the recent reports, it was seen that ELSS funds generated around 20%-30% returns when invested for 3 years, which is much more than the returns generated by other Mutual Funds.
Comparison Of ELSS & Other Tax Saving Investment Options
The comparison of ELSS and other tax saving is based on parameters like tenure, returns, eligibility for Deduction under 80c, etc.
Let's have a look:
| Parameter | PPF | NSC | FD | ELSS |
|---|---|---|---|---|
| Tenure | 15 years | 6 years | 5 Years | 3 years |
| Returns | 7.60 % (Compounded Annually) | 7.60 % (Compounded Annually) | 7.00 - 8.00 % (Compounded Annually) | No Assured Divividend / Return as it market linked |
| Min. Investment | Rs. 500 | Rs. 100 | Rs. 1000 | Rs. 500 |
| Max. Investment | Rs. 1.5 Lakhs | No Upper Limit | No Upper Limit | No Upper Limit |
| Amount Eligible for Deduction under 80c | Rs. 1.5 Lakhs | Rs. 1.5 Lakhs | Rs. 1.5 Lakhs | Rs. 1.5 Lakhs |
| Taxation for Interest/return | Tax-Free | Interest Taxable | Interest Taxable | Gains up to Rs 1 lakh are free of tax. Tax at 10% applies to gains above Rs 1 lakh |
| Safety/Ratings | Safe | Safe | Safe | Risk |
Top 5 ELSS Funds To Invest In 2022
Below is the list of Fund having Net Assets/AUM between 100 - 200 Crores.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2021 (%) BOI AXA Tax Advantage Fund Growth ₹103.11
↓ -0.17 ₹676 6.9 17 4.8 23.7 13.2 41.5 HDFC Long Term Advantage Fund Growth ₹595.168
↑ 0.28 ₹1,318 1.2 15.4 35.5 20.6 17.4 PGIM India Tax Savings Fund Growth ₹25.26
↑ 0.05 ₹437 7.3 14.2 10.7 19.9 12.4 37.5 Principal Tax Savings Fund Growth ₹350.029
↑ 0.22 ₹984 5.5 14.8 9.1 19.1 10 32.1 Mahindra Mutual Fund Kar Bachat Yojana Growth ₹19.7047
↑ 0.03 ₹517 5.1 14.7 8.5 18.6 9.9 39.4 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Nov 22
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The Scheme seeks to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities across all market capitalisations. The Scheme is in the nature of diversified multi-cap fund. The Scheme is not providing any assured or guaranteed returns.(There can be no assurance that the investment objectives of the Scheme will be realized.) BOI AXA Tax Advantage Fund is a Equity - ELSS fund was launched on 25 Feb 09. It is a fund with Moderately High risk and has given a Below is the key information for BOI AXA Tax Advantage Fund Returns up to 1 year are on To generate long term capital appreciation from a portfolio that is predominantly in equity and equity related instruments HDFC Long Term Advantage Fund is a Equity - ELSS fund was launched on 2 Jan 01. It is a fund with Moderately High risk and has given a Below is the key information for HDFC Long Term Advantage Fund Returns up to 1 year are on "The primary objective of the Scheme is to generate long-term capital appreciation by predominantly investing in equity & equity related instruments and to enable eligible investors to
avail deduction from total income, as permitted under the Income Tax Act, 1961 as amended from time to time. However, there is no assurance that the investment objective
shall be realize" PGIM India Tax Savings Fund is a Equity - ELSS fund was launched on 11 Dec 15. It is a fund with Moderately High risk and has given a Below is the key information for PGIM India Tax Savings Fund Returns up to 1 year are on To build a high quality growth-oriented portfolio to provide long-term capital gains to the investors, the scheme aims at providing returns through capital appreciation. Principal Tax Savings Fund is a Equity - ELSS fund was launched on 31 Mar 96. It is a fund with Moderately High risk and has given a Below is the key information for Principal Tax Savings Fund Returns up to 1 year are on The investment objective of the Scheme is to generate long-term capital appreciation through a diversified portfolio of equity and equity related securities. The Scheme does not guarantee or assure any returns. Mahindra Mutual Fund Kar Bachat Yojana is a Equity - ELSS fund was launched on 18 Oct 16. It is a fund with Moderately High risk and has given a Below is the key information for Mahindra Mutual Fund Kar Bachat Yojana Returns up to 1 year are on 1. BOI AXA Tax Advantage Fund
CAGR/Annualized return of 18.5% since its launch. Ranked 13 in ELSS category. Return for 2021 was 41.5% , 2020 was 31.2% and 2019 was 14.6% . BOI AXA Tax Advantage Fund
Growth Launch Date 25 Feb 09 NAV (29 Nov 22) ₹103.11 ↓ -0.17 (-0.16 %) Net Assets (Cr) ₹676 on 31 Oct 22 Category Equity - ELSS AMC BOI AXA Investment Mngrs Private Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.54 Sharpe Ratio -0.13 Information Ratio 0.63 Alpha Ratio -2.68 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Oct 17 ₹10,000 31 Oct 18 ₹8,654 31 Oct 19 ₹10,142 31 Oct 20 ₹11,599 31 Oct 21 ₹18,779 31 Oct 22 ₹18,973 Returns for BOI AXA Tax Advantage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22 Duration Returns 1 Month 2.7% 3 Month 6.9% 6 Month 17% 1 Year 4.8% 3 Year 23.7% 5 Year 13.2% 10 Year 15 Year Since launch 18.5% Historical performance (Yearly) on absolute basis
Year Returns 2021 41.5% 2020 31.2% 2019 14.6% 2018 -16.3% 2017 57.7% 2016 -1.2% 2015 2.1% 2014 44% 2013 9.1% 2012 24.8% Fund Manager information for BOI AXA Tax Advantage Fund
Name Since Tenure Alok Singh 27 Apr 22 0.51 Yr. Data below for BOI AXA Tax Advantage Fund as on 31 Oct 22
Equity Sector Allocation
Sector Value Financial Services 33% Consumer Cyclical 21.23% Basic Materials 9.75% Industrials 8.51% Consumer Defensive 8.31% Health Care 5.53% Energy 4.24% Technology 3.47% Utility 3.12% Real Estate 2.12% Communication Services 0.79% Asset Allocation
Asset Class Value Equity 100.07% Debt 0.08% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 18 | ICICIBANK7% ₹46 Cr 529,340 State Bank of India (Financial Services)
Equity, Since 31 Oct 21 | SBIN6% ₹40 Cr 750,000
↑ 79,000 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Dec 10 | HDFCBANK5% ₹32 Cr 225,000
↑ 11,000 Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 18 | RELIANCE3% ₹22 Cr 91,009 NTPC Ltd (Utilities)
Equity, Since 30 Apr 22 | 5325553% ₹20 Cr 1,260,000 Canara Bank (Financial Services)
Equity, Since 31 Aug 22 | 5324833% ₹18 Cr 800,000
↑ 245,000 Varun Beverages Ltd (Consumer Defensive)
Equity, Since 28 Feb 22 | VBL3% ₹18 Cr 168,692 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 31 May 22 | M&M3% ₹17 Cr 134,000
↓ -8,000 Schaeffler India Ltd (Consumer Cyclical)
Equity, Since 31 Jan 22 | SCHAEFFLER3% ₹16 Cr 51,000
↓ -4,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 30 Sep 18 | KOTAKBANK2% ₹16 Cr 87,607 2. HDFC Long Term Advantage Fund
CAGR/Annualized return of 21.4% since its launch. Ranked 23 in ELSS category. . HDFC Long Term Advantage Fund
Growth Launch Date 2 Jan 01 NAV (14 Jan 22) ₹595.168 ↑ 0.28 (0.05 %) Net Assets (Cr) ₹1,318 on 30 Nov 21 Category Equity - ELSS AMC HDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 2.25 Sharpe Ratio 2.27 Information Ratio -0.15 Alpha Ratio 1.75 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Oct 17 ₹10,000 31 Oct 18 ₹9,676 31 Oct 19 ₹10,850 31 Oct 20 ₹10,241 31 Oct 21 ₹17,071
Purchase not allowed Returns for HDFC Long Term Advantage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22 Duration Returns 1 Month 4.4% 3 Month 1.2% 6 Month 15.4% 1 Year 35.5% 3 Year 20.6% 5 Year 17.4% 10 Year 15 Year Since launch 21.4% Historical performance (Yearly) on absolute basis
Year Returns 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Fund Manager information for HDFC Long Term Advantage Fund
Name Since Tenure Data below for HDFC Long Term Advantage Fund as on 30 Nov 21
Equity Sector Allocation
Sector Value Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 3. PGIM India Tax Savings Fund
CAGR/Annualized return of 14.2% since its launch. Return for 2021 was 37.5% , 2020 was 17.9% and 2019 was 8.2% . PGIM India Tax Savings Fund
Growth Launch Date 11 Dec 15 NAV (29 Nov 22) ₹25.26 ↑ 0.05 (0.20 %) Net Assets (Cr) ₹437 on 31 Oct 22 Category Equity - ELSS AMC Pramerica Asset Managers Private Limited Rating Risk Moderately High Expense Ratio 0 Sharpe Ratio 0.22 Information Ratio 0.13 Alpha Ratio 3.02 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Oct 17 ₹10,000 31 Oct 18 ₹9,506 31 Oct 19 ₹10,748 31 Oct 20 ₹10,320 31 Oct 21 ₹16,797 31 Oct 22 ₹17,945 Returns for PGIM India Tax Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22 Duration Returns 1 Month 3.3% 3 Month 7.3% 6 Month 14.2% 1 Year 10.7% 3 Year 19.9% 5 Year 12.4% 10 Year 15 Year Since launch 14.2% Historical performance (Yearly) on absolute basis
Year Returns 2021 37.5% 2020 17.9% 2019 8.2% 2018 -6.4% 2017 39.3% 2016 1.7% 2015 2014 2013 2012 Fund Manager information for PGIM India Tax Savings Fund
Name Since Tenure Srinivas Ravuri 14 Sep 19 3.13 Yr. Puneet Pal 1 Dec 21 0.92 Yr. Utkarsh Katkoria 1 Jun 21 1.42 Yr. Data below for PGIM India Tax Savings Fund as on 31 Oct 22
Equity Sector Allocation
Sector Value Financial Services 32.75% Health Care 9.73% Industrials 9.47% Technology 8.97% Basic Materials 6.91% Energy 6.74% Consumer Cyclical 6.17% Utility 5.03% Communication Services 4.68% Consumer Defensive 3.63% Asset Allocation
Asset Class Value Cash 5.68% Equity 94.09% Debt 0.24% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | ICICIBANK8% ₹32 Cr 370,500 Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 17 | RELIANCE6% ₹24 Cr 99,750 Infosys Ltd (Technology)
Equity, Since 31 Dec 15 | INFY6% ₹23 Cr 161,129 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Dec 15 | HDFCBANK5% ₹22 Cr 154,200 HDFC Life Insurance Company Limited (Financial Services)
Equity, Since 31 Mar 22 | HDFCLIFE5% ₹20 Cr 377,700
↑ 155,000 Bharti Airtel Ltd (Communication Services)
Equity, Since 28 Feb 19 | BHARTIARTL5% ₹19 Cr 240,805 Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Sep 17 | LT4% ₹18 Cr 95,664 Axis Bank Ltd (Financial Services)
Equity, Since 30 Nov 21 | 5322154% ₹16 Cr 218,000 State Bank of India (Financial Services)
Equity, Since 31 Oct 18 | SBIN4% ₹16 Cr 294,174 ITC Ltd (Consumer Defensive)
Equity, Since 31 Aug 17 | ITC4% ₹15 Cr 450,000 4. Principal Tax Savings Fund
CAGR/Annualized return of 16% since its launch. Ranked 8 in ELSS category. Return for 2021 was 32.1% , 2020 was 18.9% and 2019 was 2.5% . Principal Tax Savings Fund
Growth Launch Date 31 Mar 96 NAV (29 Nov 22) ₹350.029 ↑ 0.22 (0.06 %) Net Assets (Cr) ₹984 on 31 Oct 22 Category Equity - ELSS AMC Principal Pnb Asset Mgmt. Co. Priv. Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 2.44 Sharpe Ratio 0.06 Information Ratio 0.41 Alpha Ratio 0.62 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Oct 17 ₹10,000 31 Oct 18 ₹9,133 31 Oct 19 ₹9,485 31 Oct 20 ₹9,572 31 Oct 21 ₹15,432 31 Oct 22 ₹16,103 Returns for Principal Tax Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22 Duration Returns 1 Month 2.3% 3 Month 5.5% 6 Month 14.8% 1 Year 9.1% 3 Year 19.1% 5 Year 10% 10 Year 15 Year Since launch 16% Historical performance (Yearly) on absolute basis
Year Returns 2021 32.1% 2020 18.9% 2019 2.5% 2018 -9.2% 2017 48.8% 2016 6.2% 2015 2.7% 2014 49.4% 2013 8.5% 2012 46.5% Fund Manager information for Principal Tax Savings Fund
Name Since Tenure Sudhir Kedia 29 Oct 19 3.01 Yr. Rohit Seksaria 1 Jan 22 0.83 Yr. Data below for Principal Tax Savings Fund as on 31 Oct 22
Equity Sector Allocation
Sector Value Financial Services 37.64% Consumer Cyclical 15.97% Industrials 12.51% Technology 9.48% Health Care 5.49% Consumer Defensive 4.13% Energy 3.9% Basic Materials 3.69% Communication Services 2.1% Real Estate 0.8% Asset Allocation
Asset Class Value Cash 3.96% Equity 96.04% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK9% ₹89 Cr 1,034,000
↓ -10,215 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 09 | HDFCBANK5% ₹48 Cr 335,117 State Bank of India (Financial Services)
Equity, Since 30 Apr 05 | SBIN4% ₹42 Cr 787,020 Infosys Ltd (Technology)
Equity, Since 31 Jan 09 | INFY4% ₹41 Cr 288,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Dec 21 | RELIANCE4% ₹37 Cr 155,000 Ashok Leyland Ltd (Industrials)
Equity, Since 31 Aug 20 | 5004774% ₹37 Cr 2,405,310 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 08 | HDFC4% ₹36 Cr 157,000 Polycab India Ltd (Industrials)
Equity, Since 30 Nov 20 | POLYCAB3% ₹32 Cr 126,000 Axis Bank Ltd (Financial Services)
Equity, Since 30 Sep 17 | 5322153% ₹30 Cr 410,005 Maruti Suzuki India Ltd (Consumer Cyclical)
Equity, Since 31 Oct 19 | MARUTI3% ₹29 Cr 33,000 5. Mahindra Mutual Fund Kar Bachat Yojana
CAGR/Annualized return of 11.7% since its launch. Return for 2021 was 39.4% , 2020 was 14.1% and 2019 was 4.5% . Mahindra Mutual Fund Kar Bachat Yojana
Growth Launch Date 18 Oct 16 NAV (29 Nov 22) ₹19.7047 ↑ 0.03 (0.16 %) Net Assets (Cr) ₹517 on 31 Oct 22 Category Equity - ELSS AMC Mahindra Asset Management Company Pvt. Ltd. Rating Risk Moderately High Expense Ratio 2.38 Sharpe Ratio -0.09 Information Ratio -0.17 Alpha Ratio -1.66 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Oct 17 ₹10,000 31 Oct 18 ₹8,924 31 Oct 19 ₹9,858 31 Oct 20 ₹9,371 31 Oct 21 ₹15,689 31 Oct 22 ₹15,966 Returns for Mahindra Mutual Fund Kar Bachat Yojana
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 29 Nov 22 Duration Returns 1 Month 3.6% 3 Month 5.1% 6 Month 14.7% 1 Year 8.5% 3 Year 18.6% 5 Year 9.9% 10 Year 15 Year Since launch 11.7% Historical performance (Yearly) on absolute basis
Year Returns 2021 39.4% 2020 14.1% 2019 4.5% 2018 -9.8% 2017 24.8% 2016 2015 2014 2013 2012 Fund Manager information for Mahindra Mutual Fund Kar Bachat Yojana
Name Since Tenure Manish Lodha 21 Dec 20 1.86 Yr. Fatema Pacha 16 Oct 20 2.04 Yr. Data below for Mahindra Mutual Fund Kar Bachat Yojana as on 31 Oct 22
Equity Sector Allocation
Sector Value Financial Services 33.21% Technology 13.58% Industrials 12.42% Consumer Cyclical 10.25% Basic Materials 7.72% Consumer Defensive 5.64% Health Care 5.44% Energy 4.49% Real Estate 2.51% Utility 1.55% Asset Allocation
Asset Class Value Cash 3.18% Equity 96.82% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Dec 16 | HDFCBANK9% ₹45 Cr 313,876 Infosys Ltd (Technology)
Equity, Since 29 Feb 20 | INFY8% ₹41 Cr 286,807 ICICI Bank Ltd (Financial Services)
Equity, Since 31 May 19 | ICICIBANK8% ₹40 Cr 467,120
↓ -55,000 Axis Bank Ltd (Financial Services)
Equity, Since 31 Jan 21 | 5322154% ₹21 Cr 279,631
↑ 85,000 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Apr 20 | HINDUNILVR4% ₹18 Cr 68,112 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Aug 18 | LT4% ₹18 Cr 95,542 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 18 | RELIANCE3% ₹17 Cr 70,154 Bajaj Finance Ltd (Financial Services)
Equity, Since 30 Nov 21 | 5000343% ₹16 Cr 22,000
↑ 7,000 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 May 19 | TCS3% ₹15 Cr 49,286 Asian Paints Ltd (Basic Materials)
Equity, Since 30 Sep 22 | 5008202% ₹10 Cr 29,500
↑ 29,500
How ELSS Better Than Other Tax Saving Investments?
There are various Tax Saving Investment options in India among which ELSS is one of the best options. How? Here are some of the reasons mentioned.
High Returns over Long-Term
The ELSS funds allocate the highest number of assets in stock market among other tax saving investments. So, these funds earn best Inflation-beating returns amongst all. If invested for a longer duration, the rate of returns of ELSS can easily beat the returns of other traditional debt-oriented investments. Therefore, ELSS Mutual funds provide investors with the best of both worlds- high returns and tax benefits.
Shortest Lock-in Period
The ELSS Mutual Funds have a short lock-in period as compared to the traditional tax saving investment options. The lock-in period of ELSS funds is 3 years while that of PPF is 15 years and of NPS is until retirement. So, by investing in ELSS your money does not get locked for a longer duration and you can stop investing soon after the lock-in is over.
Highly Flexible Investment
The flexibility of ELSS Mutual Funds is much more than all other tax saving investments. Unlike traditional investments, there is no need of investing in only one type of option. ELSS funds enable you to diversify your portfolio with different kinds of investments. Also, the investors can remain invested in these funds even after the lock-in period is over. So, once the lock-in is over, you can easily choose to remain invested or redeem as per your convenience.
Conclusion
In conclusion, here are a few tips for investors investing in ELSS Funds.
- Start investing in ELSS early
- Invest within your limits
- Do not choose dividend reinvestment
- Redeem slowly and gradually
- Invest via a SIP
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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