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3 Best ELSS (Tax Savings) Funds, Rated By Value Research, Upto 53.32% SIP Return

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The Equity Linked Saving Scheme (ELSS) funds are commonly known as tax savings equity funds, which is a kind of mutual fund.

 

Investment in the ELSS Funds: What to look for

Investment in the ELSS Funds: What to look for

People who come under the tax slabs, as directed by the Finance Ministry, generally invest in the ELSS funds. An investor can invest upto a maximum of Rs. 1.5 lakh in these kinds of funds, each year. You can invest in ELSS funds through SIPs. For the monthly wage earners, SIPs are an easy option. You should remember that the ELSS funds will have a lock-in period of minimum of 3 years. Hence, you should always check the fund's 3-5 years' returns. You can also maintain the fund, even after the 3 years lock-in period, if the fund provides good returns. The minimum SIP investment amount for these funds is Rs. 500.

If these mutual funds are sold after 1 year capital gains upto Rs. 1 lakh in an FY are exempt from tax, and capital gains more than Rs. 1 lakh is taxed at the rate of 10%. in case the units are sold within 1 year, the entire amount of gain will be taxed at 15%.

Here are 3 ELSS funds' portfolios that have been discussed, those are rated by the reputed research firm, Value Research.

1. BOI AXA Tax Advantage Direct Plan
 

1. BOI AXA Tax Advantage Direct Plan

The BOI AXA Tax Advantage Direct Plan has been rated with 4 star by Value Research. As mentioned above, this article will discuss the SIP returns from the funds comparatively, for different terms. This fund's SIP return in the last 1 year was 34.86%, it was 38.44% in the last 3 years, and 25.88% in the last 5 years.

This fund was launched in January, 2013. Assets of this fund are Rs. 517 Crore (as on Nov 30, 2021), and the Average market capitalization is Rs. 75,725 crore. The expense ratio of this fund stood at 1.57% (as on Nov 30, 2021). This fund holds a 98.9% position in equities, and 1.0% in cash and cash equivalents. The BOI AXA Tax Advantage Direct Plan invests 32.20% in giant funds, 16.17% in large funds, 25.32% in mid funds, and 7.38% in small funds.

The top 5 holdings of this fund are, ICICI Bank, HDFC Bank, Bajaj Finance, Infosys Technology, and Divi's Laboratories.

2. IDFC Tax Advantage (ELSS) Direct Plan

2. IDFC Tax Advantage (ELSS) Direct Plan

The IDFC Tax Advantage (ELSS) Direct Plan has been rated with 4 star by Value Research. This fund's SIP return in last 1 year was 36.46%, it was 36.44% in the last 3 years, and 23.16% in the last 5 years.

This fund was launched in January, 2013. Assets of this fund are Rs. 3,355 Crore (as on Nov 30, 2021), and the Average market capitalization is Rs. 76,993 crore. The expense ratio of this fund stood at 0.74% (as on Nov 30, 2021). This fund holds a 97.8% position in equities, and 2.2% in cash and cash equivalents. The IDFC Tax Advantage (ELSS) invests 44.70% in giant funds, 12.34% in large funds, 25.32% in mid funds, and 19.05% in small funds.

The top 5 holdings of this fund are, ICICI Bank, Infosys Technology, State Bank of India, HDFC Bank, and Reliance Industries - energy.

3. Quant Tax Plan Direct Plan

3. Quant Tax Plan Direct Plan

The Quant Tax Plan Direct Plan has been rated with 5 star by Value Research. This fund's SIP return in the last 1 year was 48.42%, it was 53.32% in the last 3 years, and 34.29% in the last 5 years.

This fund was launched in January, 2013. Assets of this fund are Rs. 555 Crore (as on Nov 30, 2021), and the Average market capitalization is Rs. 75,674 crore. The expense ratio of this fund stood at 0.57% (as on Oct 31, 2021). This fund holds a 94.2% position in equities, and 5.8% in cash and cash equivalents. The Quant Tax Plan Direct Plan invests 45.48% in giant funds, 17.93% in large funds, 25.32% in mid funds, and 19.62% in small funds.

The top 5 holdings of this fund are Vedanta Metals, ITC, Reliance Industries, Adani Enterprises, and State Bank of India.

Performance comparison

Performance comparison

Although the BOI AXA Tax Advantage Direct Plan has given good returns in a different period, but the fund's Expense Ratio (ER) is higher than the two other funds. ER will determine how much amount of the fund's asset is being used for administrative and other operating expenses. A higher ER is not quite profitable for the investors. On the other hand, the IDFC Tax Advantage has the highest assets, which makes the fund more secured than the other funds.

However, if you are thinking about returns, you can check the portfolio of Quant Tax Plan Direct Plan, as this has given the best returns, among the above-mentioned funds. The fund has given a 53.32% in the last 3 years, and 34.29% in the last 5 years. As ELSS funds are investment tools with a long term lock-in period, this should be considered as an important factor.

Apart from the above-mentioned plans, the Mirae Asset Tax Saver Fund - Direct Plan is another ELSS fund, which has been rated with 5 star by Crisil.

Disclaimer

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the research firm are not liable for any losses caused as a result of decisions based on the article.

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