Equity Linked Savings Schemes (ELSS) tend to offer you tax benefits under Sec80c of the Income Tax Act and also offer the possibility of gaining good returns. Here are three ELSS plans that are rated No1 by Crisil.
Union Long Term Equity Fund
This is an ELSS fund, which like all other ELSS funds has a lock-in period of 3-years. This fund has done well over the years and has reported a returns of nearly 46% over the last 1-year and an annualized returns of 23.20% over the last 3-years and 17.20% over the last 5-years. The SIP returns have been a solid 41% over the last 1-year.
Having said that of course it had largely to do with the way the markets have rallied. However, going forward we do not expect stupendous returns. The fund has holdings including names like HDFC Bank, ICICI Bank, Infosys, HDFC and Ultratech Cement.
The equity holdings in the fund is almost 96%. We suggest that investors should not invest lumpsum and stick to the SIP route for investments.
BOI AXA Tax Advantage Fund
The BOI Axa Advantage Tax Fund is another ELSS scheme that has been rated No 1 by CRISIL. The 1-year returns from the fund has been 59.75%, while the 3-year returns has been 29.79% and the 5-year returns has been 20.95%. The fund has been a good and consistent performer over the years.
The portfolio of the fund consists of names like ICICI Bank, HDFC Bank, Bajaj Finance, Infosys and Divis Labs.
Over the last few months we have been telling investors to invest only through SIPs as the markets have gone-up sharply and are at dangerously high levels. We continue to maintain the same stance. Investors need to be very careful with the Sensex at around the 59,000 points level. Invest only in small amounts.
Quant Tax Plan
This is a highly rated ELSS plan that has also been rated 5-star by Morningstar, apart from the No 1 ratings by CRISIL. This is an open ended fund whose net asset value under the growth plan is currently Rs 219.49. A new investor can invest a sum of Rs 500 and in multiples of Rs 1 thereafter.
For Systematic Investment Plan (SIP), the minimum amount is Rs 500 and in multiples of Rs 1 thereafter. As there is a lock-in of three years for all ELSS plans, because of sec80c benefits, there is no exit load.
The investment objective of the Scheme is to generate Capital Appreciation by investing predominantly in a well diversified portfolio of Equity Shares with growth potential. This income may be complemented by possible dividend and other income. All of the ELSS schemes are essentially long-term given that there is a lock-in period of 3-years.
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