Prior to investing in a mutual fund, retail investors tend to examine its past returns vis-à-vis other schemes in the same category. Although an investor’s decision to invest is based on several factors, the past returns is a key reason that an investor can not afford to overlook.
It is, therefore, prudent to scan through the historical returns delivered by mutual fund schemes to help investors take an investing call.
Here, we sift through some top-performing ELSS funds which have delivered higher than 18 percent returns in the past 10 years. Let us first understand what ELSS mutual funds are?
What are ELSS Funds?
These refer to the mutual funds which have at least 80 percent investment in stocks in accordance with Equity Linked Saving Scheme (ELSS), 2005, notified by the Ministry of Finance.
They have a lock-in period of three years (shortest amongst all other tax saving options) and are eligible for tax deduction up to ₹1.5 lakh under Sec 80C of the Income Tax Act.
In other words, if you invest in ELSS funds, the amount equivalent to this investment up to a maximum of ₹1.5 lakh is deducted from your taxable income, thus helping you save tax on it.
There are 42 mutual fund schemes in this category with total assets under management (AUM) of ₹2.13 lakh crore, showed the AMFI data as on March 31, 2024.
As we can see in the table below, the top-performing ELSS funds gave 10-year-returns in the range of 18 to 25 percent per annum.
Quant ELSS Tax Saver delivered an annualised return of 25.51 percent in the past 10 years, Bank of India ELSS Tax Saver Fund gave 19.19 percent return, JM ELSS Tax Saver Fund gave 18.42 percent return.
| ELSS funds | 10-year-return (%) |
| Quant ELSS Tax Saver Fund | 25.51 |
| Bank of India ELSS Tax Saver Fund | 19.19 |
| JM ELSS Tax Saver Fund | 18.42 |
| DSP ELSS Tax Saver Fund | 18.37 |
| Bandhan ELSS Tax Saver Fund | 18.20 |
| Kotak ELSS Tax Saver Fund | 18.11 |
(Source: AMFI)
Other ELSS mutual fund schemes which gave more than 18 percent annualised return include Bandhan ELSS Tax Saver Fund and Kotak ELSS Tax Saver Fund.
ALSO READ: Maximise your mutual fund returns: 15 SIP myths debunked
Here, it is vital to mention that historical returns are indicative of a scheme’s future growth potential. These schemes may or may not continue to grow at the same pace because their future performance is a function of numerous factors, many of which are unpredictable and almost impossible to predict.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
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Published: 08 May 2024, 09:13 AM IST