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Best Performing ELSS Mutual Funds 2019

Best Performing ELSS

It’s time for tax saving and tax planning. A new financial year has begun, and it’s advisable to do tax planning at the beginning of the year rather than doing last-minute tax planning.

ELSS (Equity Link Saving Scheme) is one of the best ways to save taxes. ELSS offers multiple benefits such as lower lock-in period (only 3 years). Higher returns compared to other tax saving instruments. Tax deduction up to 1.5 Lakh under section 80C and SIP option for investment.

If you are planning to invest in ELSS and searching for best performing ELSS mutual funds, you are at right place. In this post, I will share details about Best Performing ELSS Mutual Funds.

Also Read – ELSS Mutual Fund – Best way to Save Tax and Generate Wealth

What is ELSS Mutual Funds?

A Full form of ELSS is equity linked saving scheme. The ELSS are open-ended diversified equity schemes offered by Mutual fund houses of India. ELSS is a tax saving instrument. Investment in ELSS is done using lump sum and SIP options.

Earlier ELSS was not taxable. However, in 2018 it was revealed that return generated from ELSS would become taxable. Long term capital gain tax would be applicable on ELSS returns. Despite taxes, ELSS is still one of the preferred tax saving investment option. There are two types of ELSS funds available in the market – Growth, and Dividend.

How ELSS is different from other Investment Options?

Few points which differentiate ELSS from other investment options are given below.

  • The expected rate of return in the equity-linked saving scheme is high.
  • The lock-in period associated with ELSS is low 3 years compared to other investment options.
  • You can invest in tax saving mutual funds via SIP and lump sum option.
  • The returns generated by the Equity Linked Saving Scheme are market linked.
  • The equity-linked saving scheme is suitable for high risk investors.

ELSS Vs Other Tax Saving Investment Options

Tax-Saving Investment OptionsLock-in PeriodReturnRisk Profile
ELSS3 years12% – 18%High
Fixed Deposit5 years6.50% -8.25%Low
Public Provident Fund15 years8%Low
National Pension SystemUp to 60 years of age10.50%Moderate

How to evaluate the Best ELSS Mutual Funds?

You should consider the following parameters while evaluating Best ELSS Mutual Funds.

  1. Fund Returns

You need to evaluate fund based on fund returns. Make sure to look at the past 5 year’s performance before investing in a particular fund. Select the consistent performer fund. It is a good idea to select a fund which is performing better than the benchmark.

  1. Fund Reputation & Fund Manager

Select the fund based on fund reputation and asset under management. You should look at the fund manager profile. The fund manager should be skilled and experienced.

  1. Expense Ratio

Expense ratio is the next important parameter. You should go for a fund with a lower expense ratio. Lower expense ratio means higher returns.

  1. Financial Parameters

Make sure to go through various financial parameters such as Standard Deviation, Sharp Ratio, Alpha and Beta for analysing fund performance. You should select fund with lower standard deviation and lower beta value.

Best Performing ELSS Mutual Funds 2019

Top ELSS Funds3 Years5 Years
Aditya Birla Sun Life Tax Relief 9612%16.99%
DSP Tax Saver Fund13.30%15.77%
Invesco India Tax Plan12.15%15.68%
Kotak Tax Saver Regular Plan13.39%15.76%
L&T Tax Advantage11.84%13.63%
Axis Long Term Equity Fund12.79%16.78%
Mirae Asset Tax Saver19.21%
Principal Tax Saving Fund13.71%14.44%

Points to consider before investing in ELSS

Few important points to consider before investing in ELSS are given below.

  • You can invest any amount you like in Equity Linked Saving Scheme but amount up to 1.5 lakh will be considered for tax exemption.
  • Lock-in period applicable for tax saving mutual fund is 3 years.
  • You need to pay long term capital gain tax on equity saving scheme gains. You can avail tax exemption up to 1 Lakh on capital gains.
  • The risk involved in Equity Linked Saving Scheme is higher compared to other tax saving instruments.
  • You should go for a systematic investment plan while investing in tax saving mutual funds.

Over to you –

Do you invest in ELSS?

Which are your favourite tax saving investment options?

Do share your views in the comment section given below.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.