2 Best ELSS Funds For Upto 38% Returns, In Past 3 Years, To Save Tax

The Equity Linked Savings Schemes are commonly referred to as the ELSS funds by investors.

What are the ELSS funds?

These funds are the tax savings funds, as guided under Section 80C of the Income Tax Act, utilized by people who come under the tax slabs. Along with ELSS funds, many investors also look out for LIC for the same purpose. One can invest a maximum of Rs. 1.5 lakh in the ELSS funds to avail of the tax deductions on investments each year.

With the benefits of tax deductions, these funds come with higher risks and a minimum lock-in period of 3 years. You can continue with the same fund even after 3 years, but before that, your investment will be stuck with the fund. So, investors wonder how to select an ELSS fund? To answer this, you can find two ways. Either you can check the recent ratings, given by reputed research firms, or check the last 3 years-2 years returns for the funds. Here, we have short-listed 2 ELSS funds for investors to look out for, considering its 3 years returns, which have been more than 35%, which is quite unusual for ELSS funds.

1. SBI Long Term Advantage Fund - Series IV

SBI Long Term Advantage Fund - Series IV is a direct plan, which has given a return of 35.12% in the last 3 years. In the last 2 years, this fund has given returns, while in the past 1 year it has given returns. The fund's Asset Under Management is Rs. 191.47 Crore and NAV stood at Rs. 31.01, till December 16, 2021 (variable). This fund's Equity Holding is 94.39%. The top 5 holdings of this fund are State Bank Of India, Rajratan Global Wire Ltd. (Steel products), Sheela Foam Ltd. (Houseware), Ratnamani Metals & Tubes Ltd. (Steel products), HDFC Bank. This fund's Large Cap Investments are 25.41%, Mid Cap Investments are 5.59%, and Small Cap Investments are 39.07%

2. Quant Tax Plan

Quant Tax Plan is a direct plan, which has given a return of 37.83% in the last 3 years. In the last 2 years, this fund has given 58.15% returns, while in the past 1 year it has given 72.02% returns. The fund's Asset Under Management is Rs. 554.93 Crore and Expense Ratio (ER) is 0.5%.

This fund's Portfolio Turnover Ratio is 283.00%, while the Category average turnover ratio stood at 43.12%. The top 5 holdings of this fund are Vedanta Ltd. (Copper & copper products), ITC Limited (Cigarettes), Reliance Industries Ltd. (Refineries/marketing), Adani Enterprises Ltd. (Trading), and the State Bank Of India. This fund's Large Cap Investments are 54.25%, Mid Cap Investments are 12.11%, and Small Cap Investments is 23.77%. Among these above 3 funds, only the Quant Tax Plan has been rated with a 5 star by a reputed rating agency, Crisil.

Apart from these funds, DSP Tax Saver Fund, BOI AXA Tax Advantage Fund, Canara Robeco Equity Tax Saver, PGIM India Long Term Equity Fund, and Mirae Asset Tax Saver Fund are the most popular ELSS funds, that were rated highly considering their AUM and past performances.

(Data Source: moneycontrol)

(Also read: Best Rated ELSS (Tax Saving) Fund By Value Research: Should You Invest in 2022?)

(Also read: What is ELSS (Tax-Saving) Fund, Benefits: Should You Invest?)