If you stay invested in a mutual fund for a long period of time, the returns tend to grow multifold for what is known as 'compounding'. The gains earned in the first few years are added to the corpus, thus making it grow considerably over a period of time.
Here, we share the list of ELSS funds, which have given over 20 percent return in the past five years. When a mutual fund scheme delivers an annualised return of 20 percent over a five-year period, the corpus of ₹one lakh appreciates to ₹2.48 lakh at the end of five years.
But before moving forward, let us understand what exactly are ELSS funds?
Equity linked savings schemes invest at least 80 per cent in stocks in accordance with Equity Linked Saving Scheme, 2005. These funds have a lock-in period of three years. These schemes are eligible for tax deduction under Sec 80C of the I-T Act up to a maximum cap of ₹1,50,000.
There are 42 schemes under the category of ELSS with total AUMs amounting to ₹2.57 lakh crore, reveals the AMFI data as on Sept 30, 2024.
As we can see in the table below, the top-performing ELSS schemes have delivered anywhere between 20-32 percent annualised return. This means if someone has invested ₹one lakh in a scheme five years ago, it would have swelled to ₹2.48 lakh over a period of five years. At an annualised rate of 32 percent, an investment of ₹1 lakh grows to ₹4 lakh in five years.
Quant ELSS Tax Saver Fund delivered 32.02 percent annualised return over five years, Motilal Oswal ELSS Tax Saver Fund gave a CAGR return of 24.14 percent, while Bank of India ELSS Tax Saver Fund gave an annualised return of 25.87 percent.
ELSS Funds | 5-year-return (%) | AUM ( ₹crore) |
| Bandhan ELSS Tax Saver Fund | 22.93 | 6,902.09 |
| Bank of India ELSS Tax Saver Fund | 25.87 | 1,436.59 |
| Canara Robeco ELSS Tax Saver | 21.14 | 8,891.65 |
| DSP ELSS Tax Saver Fund | 22.04 | 17,105.36 |
| Franklin India ELSS Tax Saver Fund | 20.73 | 6,920.27 |
| HDFC ELSS Tax Saver Fund | 21.20 | 16,135.23 |
| JM ELSS Tax Saver Fund | 22.39 | 180.43 |
| Kotak ELSS Tax Saver Fund | 20.80 | 6,266.20 |
| Mirae Asset ELSS Tax Saver Fund | 20.61 | 25,407.54 |
| Motilal Oswal ELSS Tax Saver Fund | 24.14 | 4,184.36 |
| Parag Parikh ELSS Tax Saver Fund | 23.09 | 4,348.12 |
| SBI Long Term Equity Fund | 24.83 | 28,001.86 |
| Quant ELSS Tax Saver Fund | 32.02 | 10,937.48 |
(Source: AMFI)
Other schemes which have performed exceptionally well include DSP ELSS Tax Saver Fund, HDFC ELSS Tax Saver Fund and Mirae Asset ELSS Tax Saver Fund.
It is noteworthy that the historical returns, although are indicative, do not guarantee future returns. In other words, just because a scheme has performed exceptionally well in the recent past doesnt mean it will continue to perform at the same pace in future as well.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
