Equity Linked Saving Schemes (ELSS) are popular because they provide tax benefit under Sec 80C of the Income Tax Act. ELSS schemes have a risk element in the sense that they invest in equities, which makes their performance vulnerable to the stock markets. There is a lock-in period of three years on the investment.
Good returns in the last one year
This scheme was launched in early 2007. Like all other ELSS Schemes the fund has invested significant amounts in equity. Value Research Online has given a three star rating to the scheme. The scheme has given a returns of almost 47 per cent in the last one year. The portfolio comprises blue chip stocks like ICICI Bank, L&T, ITC, Maruti Suzuki etc.
A good list of blue chip stocks
In the last one year L&T Tax Saver Fund has generated a return of more than 40 per cent. Under the growth plan the net asset value is Rs 31.16, while under the dividend plan the same is Rs 21.543. The fund has blue chip stocks in its portfolio including the likes of ICICI Bank, L&T, Reliance Industries, Infosys and ITC.
Good potential for growth
Axis Long Term Equity Fund is a diversified equity fund that invests in the Indian equity markets. The fund invests in high growth stocks. It had a net asset value of Rs 22.6111 as on June 27. The portfolio includes blue chip stocks like HDFC Bank, Larsen and Toubro, Kotak Mahindra Bank, ICICI Bank and HDFC.
Significant allocation in equities
IDFC Tax Advantage is yet another ELSS scheme. In each of the last 5 years the fund has generated a superior return to the BSE 500 Index. Since a significant portion of the funds allocation is in equities, the scheme can be termed as a high risk investment.
Decent opportunity for growth
This fund has given superlative returns in the last one year. The net asset value of the funds is Rs 37.71. The risk in the fund is significantly high given that most of the money is parked in equities. The portfolio of the stocks include stocks like State Bank of India, ACC, Coal India. Having said that it must be noted that the portfolio mentioned could have undergone a change as fund managers keep churning them.