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Top Performing ELSS Schemes for Investment 2023 – 30% Returns in 3 Years

ELSS – Equity-linked saving scheme is one of the most popular tax saving schemes. ELSS gives far better returns compared to other tax-saving investment options such as tax saver FD, NSC, PPF, or life insurance.

In case you are planning to invest money for tax-saving purposes you must consider ELSS. In this post, I will share the Top 5 ELSS Schemes for Investment in 2023 -24. 

What is ELSS?

ELSS is a special type of scheme that provides the investor with tax deduction benefits under section 80C of the Income Tax Act up to a limit of Rs.1,50,000 per year. An ELSS must hold at least 80% of the portfolio in equity securities. The investment made by the investor in ELSS is locked-in for three years during which it cannot be redeemed, transferred, or pledged.

ELSS Benefits

SIP and Lumpsum Option 

ELSS offers you a lump sum as well as SIP (Systematic Investment Plan) options. This means you can invest in this fund in a single go or regularly via the SIP route at a specified date automatically. The SIP option gives you the additional benefit of averaging and staggering investment in mutual funds.

Lowest Lock-in Period 

ELSS comes with a lock-in period of 3 years. It is the lowest compared to any other tax-saving investment options. PPF comes with a lock-in period of 15 years. NPS has a lock-in period up to retirement age. Tax saving FD comes with a Lock-in period of 5 years. This clearly means ELSS offers better liquidity than all other tax-saving investment options.

Potentially Higher Returns 

ELSS scheme returns are linked with the market. This means you will get returns linked with the market. Other investment options such as PPF, and FD offers fixed returns on the other hand ELSS has the potential to generate higher returns in a medium to long-term investment horizon.

Multiple Mutual Funds Options 

Mutual funds are available in a variety of options. For investing, you have the liberty to choose from a variety of mutual funds. You can select a single mutual fund or multiple mutual funds while investing.

Looking at the benefits offered by ELSS mutual fund schemes you must be interested to invest in ELSS. Here are Top Performing ELSS Schemes for investment.

ELSS 

Top 5 ELSS Schemes for Investment 2023 – 30% Returns in 3 Years

#1 Parag Parikh Tax saver Fund – Regular Fund Growth

Parag Parikh Tax Saver Fund is one of the top-performing ELSS Mutual Funds recommended for investment. 

Rationale

  • Parag Parikh Tax Saver is five stars rated fund by CRISIL. Parag Parikh Tax Saver Fund has generated 35% returns for investors in the last 3 years.
  • Parag Parikh Tax Saver fund has 80.89% investment in domestic equities of which 65.06% is in Large Cap stocks, 3.12% is in Mid Cap stocks, and 8.96% is in Small Cap stocks. The fund has 8.18% investment in Debt, of which, 8.18% is in Low-Risk securities.
  • The expense ratio of this fund is slightly higher. This fund is recommended for long-term investment.

 #2 HDFC Tax Saver Fund – Growth

HDFC Tax Saver Fund – Growth is next on the list of Top performing ELSS mutual funds for investment.

Rationale

  • HDFC Tax Saver Fund is five stars rated fund by CRISIL. This fund has generated 34% returns for investors in the last 3 years.
  • HDFC Tax Saver fund has 94.83% investment in domestic equities of which 69.95% is in Large Cap stocks, 7.64% is in Mid Cap stocks, and 4.53% is in Small Cap stocks. This means it is a well-diversified fund for investment.
  • The expense ratio of this fund is slightly lower. You can plan to invest in this fund for the long term.

 #3 PGIM India ELSS Tax Saver Fund – Growth

PGIM India ELSS Tax Saver Fund – Growth is also one of the good choices for investment in ELSS.

Rationale

  • PGIM India ELSS tax saver fund is a four-star rated fund by CRISIL. This fund has generated 34.6% returns in the past 3 years.
  • PGIM India ELSS tax saver fund has 93.72% investment in domestic equities of which 64.83% is in Large Cap stocks, 11.12% is in Mid Cap stocks, and 4.84% is in Small Cap stocks. The fund has 0.44% investment in Debt, of which 0.44% is in Government securities.
  • The expense ratio of this fund is slightly higher.

#4 Quant Tax Plan

Quant Tax Plan is next on the list of top-performing ELSS funds for investment.

Rationale

  • Quant Tax Plan is five stars rated fund by CRISIL. This fund has generated extraordinary returns for the investor. In the past three years, this fund has generated 52% returns.
  • Quant Tax Plan fund has 98.45% investment in domestic equities of which 57.38% is in Large Cap stocks, 13.07% is in Mid Cap stocks, and 7.36% is in Small Cap stocks.
  • The expense ratio of this fund is slightly higher, however, looking at the returns generated by this fund it is the recommended fund for investment. 

#5 SBI Long-Term Equity Fund – Regular Fund Growth

SBI Long-Term Equity Fund is one of the best-performing ELSS funds for investment.

Rationale

  • SBI Long-Term Equity Fund – Regular Fund Growth is a four-star rated fund by CRISIL. This fund has generated 33.96% returns for investors in the last 3 years.
  • SBI Long-Term Equity Fund has 90.01% investment in domestic equities of which 58.5% is in Large Cap stocks, 13.85% is in Mid Cap stocks, and 8.85% is in Small Cap stocks.
  • The expense ratio of this fund is slightly lower.

Over to you

The ELSS funds mentioned above have generated very good returns for investors in the past. Looking at all other aspects these funds are expected to generate very good returns for investors in the future. You can consider these ELSS Funds for investment.

Note – Returns mentioned in the ELSS given above are Annualised Returns as of 25th April 2023.

Shitanshu Kapadia
Shitanshu Kapadiahttp://moneyexcel.com/
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 advice or legal opinion. We do not offer any stock tips, investment, insurance or finance product related advice. Please consult a qualified financial planner and do your own due diligence before making any investment decision.
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