2 best ELSS (tax savings) funds, valued by value research, up to 53.32% SIP return

Investing in ELSS funds: what to look for

People who come under fiscal supervision, as directed by the Ministry of Finance, usually invest in ELSS funds. An investor can invest up to a maximum of Rs. 1.5 lakh in this kind of fund every year. You can invest in ELSS funds through SIPs. For monthly employees, SIPs are an easy option. Remember that ELSS funds will have a blocking period of at least 3 years. Therefore, you should always check the fund’s returns over 3 to 5 years. You can also maintain the fund even after the 3 year lock-up period if the fund is performing well. The minimum SIP investment amount for these funds is Rs. 500.

If these mutual funds are sold after 1 year of capital gains up to Rs. 1 lakh in a financial year is tax exempt and capital gains above Rs. 1 lakh is taxed at the rate of 10 %. in the event that the units are sold within one year, the total amount of the capital gain will be taxed at 15%.

Here are 3 ELSS fund portfolios that were discussed, these are rated by reputable research firm Value Research.

1. Direct Plan Advantage Fiscal BOI AXA

1. Direct Plan Advantage Fiscal BOI AXA

The BOI AXA Tax Advantage Direct plan has been rated 4 stars by Value Research. As mentioned above, this article will discuss the SIP returns of the funds in a comparative way, for different durations. The SIP return of this fund in the last year was 34.86%, it was 38.44% in the last 3 years and 25.88% in the last 5 years.

This fund was launched in January 2013. The assets of this fund are Rs. 517 crore (as of November 30, 2021) and the average market cap is Rs. 75,725 crore. The expense rate of this fund was 1.57% (as of November 30, 2021). This fund holds a 98.9% position in equities and 1.0% in cash and cash equivalents. The BOI Direct Tax Advantage Plan AXA invests 32.20% in giant funds, 16.17% in large funds, 25.32% in medium-sized funds and 7.38% in small funds.

The top 5 holdings of this fund are ICICI Bank, HDFC Bank, Bajaj Finance, Infosys Technology and Divi’s Laboratories.

2. IDFC Direct Tax Advantage Plan (ELSS)

2. IDFC Direct Tax Advantage Plan (ELSS)

The IDFC Tax Advantage (ELSS) direct plan has been rated 4 stars by Value Research. The SIP return of this fund in the last year was 36.46%, it was 36.44% in the last 3 years and 23.16% in the last 5 years.

This fund was launched in January 2013. The assets of this fund are Rs. 3,355 crore (as of November 30, 2021) and the average market cap is Rs. 76,993 crore. The expense rate of this fund was 0.74% (as of November 30, 2021). This fund holds a 97.8% position in equities and 2.2% in cash and cash equivalents. The IDFC Tax Advantage (ELSS) invests 44.70% in giant funds, 12.34% in large funds, 25.32% in medium-sized funds and 19.05% in small funds .

The top 5 holdings of this fund are ICICI Bank, Infosys Technology, State Bank of India, HDFC Bank and Reliance Industries – energy.

3. Quantitative tax plan Direct plan

3. Quantitative tax plan Direct plan

The Quant Tax Plan Direct Plan has been awarded 5 stars by Value Research. The SIP return of this fund in the last year was 48.42%, it was 53.32% in the last 3 years and 34.29% in the last 5 years.

This fund was launched in January 2013. The assets of this fund are Rs. 555 Crore (as of November 30, 2021), and the average market cap is Rs. 75,674 crore. The expense ratio of this fund was 0.57% (as of October 31, 2021). This fund holds a 94.2% position in equities and 5.8% in cash and cash equivalents. The direct Quant Tax Plan invests 45.48% in giant funds, 17.93% in large funds, 25.32% in intermediate funds and 19.62% in small funds.

The top 5 holdings of this fund are Vedanta Metals, ITC, Reliance Industries, Adani Enterprises and State Bank of India.

Performance comparison

Performance comparison

Although the BOI AXA Tax Advantage Direct Plan performed well over a different time frame, the expense ratio (ER) of the fund is higher than that of the other two funds. ER will determine the amount of fund assets used for administrative and other operating expenses. A higher ER is not entirely profitable for investors. On the other hand, the IDFC tax benefit has the highest assets, which makes the fund more secure than other funds.

However, if you are thinking about returns, you may want to check out the portfolio of Quant Tax Plan Direct Plan, as this has given the best returns, among the funds mentioned above. The fund yielded 53.32% in the last 3 years and 34.29% in the last 5 years. Since ELSS funds are investment tools with a long term lock-in period, this should be considered an important factor.

Besides the plans mentioned above, the Mirae Asset Tax Saver Fund – Direct Plan is another ELSS fund, which has been rated 5 stars by Crisil.

Warning

Warning

Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author and the research company are not responsible for any losses caused by decisions based on the article.


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