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 2019
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 (%) 2018 (%) Tata India Tax Savings Fund Growth ₹17.3786
↑ 0.01 ₹1,903 -0.9 4.7 -2.2 8.6 -8.4 Principal Tax Savings Fund Growth ₹192.52
↑ 0.28 ₹407 -3.1 0.8 -9.2 8 9.2 -9.2 BNP Paribas Long Term Equity Fund (ELSS) Growth ₹37.463
↑ 0.04 ₹471 2.6 7 0 6.5 9.1 -9.3 Kotak Tax Saver Scheme Growth ₹42.419
↑ 0.03 ₹942 -0.8 5.7 -0.9 8.5 11.7 -3.8 HDFC Long Term Advantage Fund Growth ₹341.239
↑ 0.19 ₹1,451 -2.8 2.9 -2.5 9.5 9.3 -3.9 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Aug 19
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To provide medium to long term capital gains along with income tax relief to its Unitholders, while at all times emphasising the importance of capital appreciation.. Tata India Tax Savings Fund is a Equity - ELSS fund was launched on 13 Oct 14. It is a fund with Moderately High risk and has given a Below is the key information for Tata 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 growth from a diversified and actively managed portfolio of equity and equity related securities along with income tax rebate, as may be prevalent fromtime to time. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not guarantee / indicate any returns. BNP Paribas Long Term Equity Fund (ELSS) is a Equity - ELSS fund was launched on 5 Jan 06. It is a fund with Moderately High risk and has given a Below is the key information for BNP Paribas Long Term Equity Fund (ELSS) Returns up to 1 year are on The investment objective of the scheme is to generate longterm capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. Kotak Tax Saver Scheme is a Equity - ELSS fund was launched on 23 Nov 05. It is a fund with Moderately High risk and has given a Below is the key information for Kotak Tax Saver Scheme 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 1. Tata India Tax Savings Fund
CAGR/Annualized return of 12.1% since its launch. Ranked 1 in ELSS category. Return for 2018 was -8.4% , 2017 was 46% and 2016 was 2.1% . Tata India Tax Savings Fund
Growth Launch Date 13 Oct 14 NAV (16 Aug 19) ₹17.3786 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹1,903 on 30 Jun 19 Category Equity - ELSS AMC Tata Asset Management Limited Rating ☆☆☆☆☆ Risk Moderately High Expense Ratio 2.61 Sharpe Ratio 0.55 Information Ratio -0.17 Alpha Ratio -0.8 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Jul 15 ₹11,807 31 Jul 16 ₹13,072 31 Jul 17 ₹15,988 31 Jul 18 ₹16,984 31 Jul 19 ₹16,911 Returns for Tata India Tax Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month -5.7% 3 Month -0.9% 6 Month 4.7% 1 Year -2.2% 3 Year 8.6% 5 Year 10 Year 15 Year Since launch 12.1% Historical performance (Yearly) on absolute basis
Year Returns 2018 -8.4% 2017 46% 2016 2.1% 2015 13.3% 2014 2013 2012 2011 2010 2009 Fund Manager information for Tata India Tax Savings Fund
Name Since Tenure Rupesh Patel 1 Apr 15 3.84 Yr. Ennette Fernandes 18 Jun 18 0.62 Yr. Data below for Tata India Tax Savings Fund as on 30 Jun 19
Equity Sector Allocation
Sector Value Financial Services 42.22% Technology 10.43% Industrials 9.9% Consumer Cyclical 9.39% Consumer Defensive 7.05% Health Care 6.3% Energy 4.99% Basic Materials 2.56% Real Estate 0.72% Asset Allocation
Asset Class Value Cash 6.43% Equity 93.57% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 30 Nov 16 | ICICIBANK9% ₹170 Cr 4,015,000 Infosys Ltd (Technology)
Equity, Since 30 Sep 18 | INFY7% ₹133 Cr 1,680,000 HDFC Bank Ltd (Financial Services)
Equity, Since 28 Feb 10 | HDFCBANK7% ₹126 Cr 560,000 A) Repo
CBLO/Reverse Repo | -6% ₹111 Cr State Bank of India (Financial Services)
Equity, Since 30 Nov 18 | SBIN6% ₹103 Cr 3,100,000 Axis Bank Ltd (Financial Services)
Equity, Since 31 Aug 18 | 5322156% ₹101 Cr 1,500,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 May 15 | KOTAKBANK4% ₹75 Cr 495,000 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Jun 17 | HDFC4% ₹72 Cr 340,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 18 | RELIANCE3% ₹58 Cr 500,000 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Jul 18 | TCS3% ₹55 Cr 250,000 2. Principal Tax Savings Fund
CAGR/Annualized return of 15.5% since its launch. Ranked 8 in ELSS category. Return for 2018 was -9.2% , 2017 was 48.8% and 2016 was 6.2% . Principal Tax Savings Fund
Growth Launch Date 31 Mar 96 NAV (16 Aug 19) ₹192.52 ↑ 0.28 (0.15 %) Net Assets (Cr) ₹407 on 30 Jun 19 Category Equity - ELSS AMC Principal Pnb Asset Mgmt. Co. Priv. Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 2.88 Sharpe Ratio 0.01 Information Ratio 0.02 Alpha Ratio -3.89 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹11,991 31 Jul 16 ₹12,425 31 Jul 17 ₹16,206 31 Jul 18 ₹17,353 31 Jul 19 ₹15,952 Returns for Principal Tax Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month -6.1% 3 Month -3.1% 6 Month 0.8% 1 Year -9.2% 3 Year 8% 5 Year 9.2% 10 Year 15 Year Since launch 15.5% Historical performance (Yearly) on absolute basis
Year Returns 2018 -9.2% 2017 48.8% 2016 6.2% 2015 2.7% 2014 49.4% 2013 8.5% 2012 46.5% 2011 -30.4% 2010 15% 2009 64.7% Fund Manager information for Principal Tax Savings Fund
Name Since Tenure Ravi Gopalakrishnan 29 Jul 19 0 Yr. Data below for Principal Tax Savings Fund as on 30 Jun 19
Equity Sector Allocation
Sector Value Financial Services 33.22% Basic Materials 14.77% Consumer Defensive 12.19% Technology 8.79% Industrials 7.52% Consumer Cyclical 5.82% Utility 5.5% Health Care 4.36% Energy 4.11% Communication Services 1.85% Asset Allocation
Asset Class Value Cash 1.87% Equity 98.13% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK6% ₹22 Cr 509,143 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 09 | HDFCBANK5% ₹21 Cr 91,334 State Bank of India (Financial Services)
Equity, Since 30 Apr 05 | SBIN4% ₹16 Cr 479,851 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 08 | RELIANCE4% ₹16 Cr 134,452 Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 14 | TCS4% ₹15 Cr 66,040 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | KOTAKBANK4% ₹14 Cr 89,915 ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC3% ₹12 Cr 455,396 Infosys Ltd (Technology)
Equity, Since 31 Jan 09 | INFY3% ₹11 Cr 136,594 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 13 | LT3% ₹11 Cr 77,262 Marico Ltd (Consumer Defensive)
Equity, Since 31 Aug 18 | 5316423% ₹10 Cr 276,100 3. BNP Paribas Long Term Equity Fund (ELSS)
CAGR/Annualized return of 10.2% since its launch. Ranked 22 in ELSS category. Return for 2018 was -9.3% , 2017 was 42.3% and 2016 was -6.6% . BNP Paribas Long Term Equity Fund (ELSS)
Growth Launch Date 5 Jan 06 NAV (16 Aug 19) ₹37.463 ↑ 0.04 (0.11 %) Net Assets (Cr) ₹471 on 30 Jun 19 Category Equity - ELSS AMC BNP Paribas Asset Mgmt India Pvt. Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.75 Sharpe Ratio 0.37 Information Ratio -0.82 Alpha Ratio 0.38 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹13,207 31 Jul 16 ₹13,137 31 Jul 17 ₹15,281 31 Jul 18 ₹15,772 31 Jul 19 ₹15,696 Returns for BNP Paribas Long Term Equity Fund (ELSS)
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month -2.8% 3 Month 2.6% 6 Month 7% 1 Year 0% 3 Year 6.5% 5 Year 9.1% 10 Year 15 Year Since launch 10.2% Historical performance (Yearly) on absolute basis
Year Returns 2018 -9.3% 2017 42.3% 2016 -6.6% 2015 7.7% 2014 53% 2013 7.7% 2012 34.3% 2011 -15% 2010 14.9% 2009 70.2% Fund Manager information for BNP Paribas Long Term Equity Fund (ELSS)
Name Since Tenure Abhijeet Dey 16 Nov 16 2.54 Yr. Karthikraj Lakshmanan 7 Oct 16 2.65 Yr. Data below for BNP Paribas Long Term Equity Fund (ELSS) as on 30 Jun 19
Equity Sector Allocation
Sector Value Financial Services 36.29% Industrials 10.3% Technology 9.19% Basic Materials 8.42% Consumer Cyclical 8.42% Utility 5.76% Consumer Defensive 4.95% Communication Services 1.58% Energy 1.3% Health Care 1.07% Asset Allocation
Asset Class Value Cash 5.86% Equity 94.14% Top Securities Holdings / Portfolio
Name Holding Value Quantity Treps
CBLO/Reverse Repo | -12% ₹54 Cr HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 08 | HDFCBANK9% ₹41 Cr 180,000
↓ -10,000 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 12 | ICICIBANK9% ₹38 Cr 900,000
↑ 100,000 Infosys Ltd (Technology)
Equity, Since 31 Mar 09 | INFY6% ₹26 Cr 325,000
↑ 120,000 Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Jun 18 | TCS3% ₹15 Cr 70,000 Axis Bank Ltd (Financial Services)
Equity, Since 31 Aug 18 | 5322153% ₹15 Cr 227,141
↓ -67,859 ICICI Prudential Life Insurance Co Ltd (Financial Services)
Equity, Since 31 Oct 17 | ICICIPRULI3% ₹14 Cr 354,999
↑ 25,000 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Oct 17 | LT3% ₹13 Cr 95,988
↓ -25,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 28 Feb 15 | KOTAKBANK3% ₹13 Cr 85,000
↑ 10,000 Asian Paints Ltd (Basic Materials)
Equity, Since 31 Oct 14 | 5008203% ₹12 Cr 77,500 4. Kotak Tax Saver Scheme
CAGR/Annualized return of 11.1% since its launch. Ranked 19 in ELSS category. Return for 2018 was -3.8% , 2017 was 33.8% and 2016 was 7.5% . Kotak Tax Saver Scheme
Growth Launch Date 23 Nov 05 NAV (16 Aug 19) ₹42.419 ↑ 0.03 (0.06 %) Net Assets (Cr) ₹942 on 30 Jun 19 Category Equity - ELSS AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.73 Sharpe Ratio 0.7 Information Ratio 0.21 Alpha Ratio 6.3 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹13,529 31 Jul 16 ₹13,850 31 Jul 17 ₹16,956 31 Jul 18 ₹17,777 31 Jul 19 ₹17,750 Returns for Kotak Tax Saver Scheme
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month -5% 3 Month -0.8% 6 Month 5.7% 1 Year -0.9% 3 Year 8.5% 5 Year 11.7% 10 Year 15 Year Since launch 11.1% Historical performance (Yearly) on absolute basis
Year Returns 2018 -3.8% 2017 33.8% 2016 7.5% 2015 1.5% 2014 56.6% 2013 -6.3% 2012 36.2% 2011 -26% 2010 19.9% 2009 75% Fund Manager information for Kotak Tax Saver Scheme
Name Since Tenure Harsha Upadhyaya 25 Aug 15 3.44 Yr. Data below for Kotak Tax Saver Scheme as on 30 Jun 19
Equity Sector Allocation
Sector Value Asset Allocation
Asset Class Value Cash 2.28% Equity 97.67% Debt 0% Other 0.05% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK7% ₹59 Cr 1,400,000
↑ 25,000 Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 06 | RELIANCE6% ₹54 Cr 464,000 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 10 | HDFCBANK6% ₹54 Cr 240,000 Axis Bank Ltd (Financial Services)
Equity, Since 31 Mar 13 | 5322156% ₹52 Cr 775,000 Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 18 | TCS4% ₹37 Cr 170,000 Infosys Ltd (Technology)
Equity, Since 31 Dec 05 | INFY4% ₹36 Cr 450,000 Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 14 | LT4% ₹35 Cr 250,000 GlaxoSmithKline Consumer Healthcare Ltd (Consumer Defensive)
Equity, Since 30 Nov 17 | 5006764% ₹33 Cr 45,000 SRF Ltd (Basic Materials)
Equity, Since 30 Apr 16 | SRF3% ₹28 Cr 105,000 AU Small Finance Bank Ltd (Financial Services)
Equity, Since 30 Jun 17 | 5406113% ₹27 Cr 395,000 5. HDFC Long Term Advantage Fund
CAGR/Annualized return of 20.9% since its launch. Ranked 23 in ELSS category. Return for 2018 was -3.9% , 2017 was 36.2% and 2016 was 13% . HDFC Long Term Advantage Fund
Growth Launch Date 2 Jan 01 NAV (16 Aug 19) ₹341.239 ↑ 0.19 (0.06 %) Net Assets (Cr) ₹1,451 on 30 Jun 19 Category Equity - ELSS AMC HDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 2.49 Sharpe Ratio 0.59 Information Ratio -0.12 Alpha Ratio -0.78 Min Investment 500 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹11,292 31 Jul 16 ₹11,965 31 Jul 17 ₹15,180 31 Jul 18 ₹16,305 31 Jul 19 ₹16,123
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 16 Aug 19 Duration Returns 1 Month -6.6% 3 Month -2.8% 6 Month 2.9% 1 Year -2.5% 3 Year 9.5% 5 Year 9.3% 10 Year 15 Year Since launch 20.9% Historical performance (Yearly) on absolute basis
Year Returns 2018 -3.9% 2017 36.2% 2016 13% 2015 -2.4% 2014 44.7% 2013 11% 2012 28.8% 2011 -23.5% 2010 28.4% 2009 88.9% Fund Manager information for HDFC Long Term Advantage Fund
Name Since Tenure Chirag Setalvad 2 Apr 07 12 Yr. Amar Kalkundrikar 10 Jan 19 0.22 Yr. Data below for HDFC Long Term Advantage Fund as on 30 Jun 19
Equity Sector Allocation
Sector Value Financial Services 34.89% Industrials 15.62% Technology 11.72% Energy 11.24% Basic Materials 8.87% Consumer Defensive 5.71% Utility 2.35% Health Care 2.11% Consumer Cyclical 1.84% Communication Services 1.29% Asset Allocation
Asset Class Value Cash 4.33% Equity 95.67% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK10% ₹144 Cr 3,300,000 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Jun 13 | HDFCBANK10% ₹142 Cr 580,000
↓ -25,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Jul 05 | RELIANCE9% ₹125 Cr 1,000,000 Infosys Ltd (Technology)
Equity, Since 30 Nov 06 | INFY7% ₹106 Cr 1,453,908 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Oct 07 | LT7% ₹94 Cr 607,500 State Bank of India (Financial Services)
Equity, Since 31 Jan 03 | SBIN6% ₹94 Cr 2,600,000 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Oct 08 | HDFC6% ₹88 Cr 400,000 ITC Ltd (Consumer Defensive)
Equity, Since 31 Oct 05 | ITC5% ₹77 Cr 2,822,910 Net Current Assets
Net Current Assets | -4% ₹65 Cr Vesuvius India Ltd (Industrials)
Equity, Since 31 Jan 11 | 5201133% ₹45 Cr 400,000
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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