Before investing in a mutual fund scheme, it is essential for investors to take multiple factors into consideration. These factors encompass the historical performance of the fund manager, the reputation of the fund house, the category of the scheme, macroeconomic indicators, and most importantly, the past performance of the specific scheme. In particular, when it comes to evaluating past performance, investors commonly compare the returns generated by the scheme against those of a benchmark index. The benchmark index serves as a standard against which the mutual fund’s performance is assessed. For a fund to be considered ‘outperforming,’ it needs to consistently exceed the benchmark’s performance.
Here, we provide an overview of Equity Linked Savings Schemes (ELSS) and identify those that have managed to surpass the benchmark index. To begin, let’s clarify what Equity Linked Savings Schemes (ELSS) entail. ELSS refers to schemes that allocate a minimum of 80 percent of their assets in accordance with the Equity Linked Savings Scheme, 2005, as specified by the Ministry of Finance. Significantly, ELSS funds come with a lock-in period of three years and are eligible for income tax deductions under section 80C of the Income Tax Act, with a maximum limit of ₹1.5 lakh. The ELSS category comprises 42 schemes, with a combined net assets under management (AUM) of ₹1,79,802 crore. These schemes boast the highest number of folios among all equity-oriented schemes, totaling 1.54 crore.
Here, we present an overview of some of the top-performing Equity Linked Savings Schemes (ELSS):
- Quant Tax Plan: The Quant Tax Plan Growth was established on March 8, 2000, and currently manages assets worth ₹4,605 crores. The fund maintains a cash holding of 3.22% at the moment. Notable holdings in the fund’s portfolio include stocks of Reliance Industries, HDFC Bank, NTPC, and DLF.
- Bandhan Tax Advantage (ELSS) Regular Fund: Launched on December 26, 2008, this fund has delivered a return of 18.23% since its inception. Prominent stocks in its portfolio include ICICI Bank, HDFC Bank, Reliance Industries, Triparty Repo, and Axis Bank. The fund manages assets totaling ₹5,073 crore.
- JM Tax Gain Fund: Initiated on March 31, 2008, this fund has delivered an annualized return of 8.19% since its inception. Key holdings in its portfolio include stocks of HDFC Bank, PFC, Infosys, ICICI Bank, and L&T. Despite being a smaller fund, it maintains assets under management (AUM) amounting to ₹90 crore.