7 Top-performing ELSS (Tax Saving Mutual Funds) with High Returns on 10-Year SIP
September 5, 2023 Mutual Fund
ELSS (also known as Tax Saving Mutual Fund) is a sub-category of equity mutual funds that offers investors the opportunity to create long-term wealth and also save tax. Being market-linked, the returns on ELSS (Tax Saving Mutual Funds) are not fixed and depend on how the underlying securities in the portfolio perform. Investors can consider the Systematic Investment Plan (SIP) mode while investing in Tax Saving Mutual Funds to mitigate the impact of market volatility and benefit from the power compounding of wealth.
The ELSS (Tax Saving Mutual Fund) category comprises 24 schemes that have a track record of at least 10 years. In the last 10 years, all schemes in the category generated double-digit growth; of these, ten ELSS (Tax Saving Mutual Funds) generated SIP returns of 15% or more. The top-performing SIP generated XIRR of 24% during this period.
[Read: 3 Best ELSS to Invest in 2023 – Top Performing Tax Saving Mutual Funds in India]
What are ELSS (Tax Saving Mutual Funds)?
SEBI defines ELSS (Tax Saving Mutual Funds) as equity-oriented mutual funds that invest a minimum of 80% of their total assets in equity and equity-related instruments and come with a mandatory lock-in period of 3 years along with tax benefits. In case of investment via the SIP mode, each instalment is subject to a lock-in of three years.
These funds have the flexibility to invest across market capitalisation and sectors. Accordingly, most ELSS hold a diversified portfolio and are usually market cap and sector agnostic. ELSS may follow the growth style or value style of investing or a combination of both.
Investing in ELSS offers investors the triple advantage of tax-saving (under Section 80C of the Income Tax), wealth creation through equities, and the lowest lock-in period compared to other tax-saving instruments.
ELSS has the potential to reap higher returns for its investors, compared to other popular tax-saving instruments such as the National Saving Certificate, Tax Saving FD, Public Provident Fund, etc.
[Read: Tax Saving Mutual Funds: Who Should Invest, How to Invest, and the Best Ones to Invest]
[Read: 5 Reasons to Invest in ELSS (Tax Saving Mutual Funds)]
ELSS (Tax Saving Mutual Fund) category average SIP returns over different time frames
Past performance is not an indicator of future returns.
Data as of September 01, 2023
Returns are XIRR in percentage
Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
What is an SIP?
The SIP mode allows mutual fund investors to invest a certain fixed sum regularly over the long term in the scheme/s of their choice. This helps develop a financial discipline – the key to successful investing. It also enables averaging of investment costs as more units are added when the equity markets are trading low and fewer units when the markets are scaling up. This feature enhances the power of compounding, allowing the investors’ wealth to grow leaps and bounds over the long term. The tool used to calculate SIP returns is known as XIRR (Extended Internal Rate of Return).
[Read: 5 Key Benefits of Investing in Mutual Funds via SIP]
[Read: What is XIRR in Mutual Funds? And How to Calculate it?]
In this article, we will look at the top-performing ELSS (Tax Saving Mutual Funds) based on 10-year SIP returns.
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #1: Quant Tax Plan
Launched in March 2000, Quant Tax Plan currently has an AUM of Rs 4,434 crore. In the last 10 years, Quant Tax Plan grew at an XIRR of 24%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 4,27,980. The fund’s top stock holdings include HDFC Bank, Reliance Industries, NTPC, DLF, and SBI.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| Quant Tax Plan | 1,20,000 | 4,27,980 | 24.02 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Click here to read our detailed analysis of Quant Tax Plan.
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #2: Bandhan Tax Advantage (ELSS) Fund
Launched in December 2008, Bandhan Tax Advantage Fund currently has an AUM of Rs 5,014 crore. In the last 10 years, Bandhan Tax Advantage Fund grew at an XIRR of 18.3%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 3,14,341. The fund’s stock holdings include ICICI Bank, HDFC Bank, Reliance Industries, Axis Bank, and Infosys.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| Bandhan Tax Advt (ELSS) Fund | 1,20,000 | 3,14,341 | 18.31 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #3: Bank of India Tax Advantage Fund
Launched in February 2009, Bank of India Tax Advantage Fund currently has an AUM of Rs 841 crore. In the last 10 years, Bank of India Tax Advantage Fund grew at an XIRR of 17.9%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 3,07,179. The fund’s stock holdings include HDFC Bank, SBI, ICICI Bank, Canara Bank, and Power Finance Corporation.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| Bank of India Tax Advantage Fund | 1,20,000 | 3,07,179 | 17.88 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #4: JM Tax Gain Fund
Launched in March 2008, JM Tax Gain Fund currently has a small-sized AUM of Rs 87 crore. In the last 10 years, JM Tax Gain Fund grew at an XIRR of about 17.2%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 2,96,258. The fund’s stock holdings include HDFC Bank, Ultratech Cement, Power Finance Corporation, ICICI Bank, and L&T.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| JM Tax Gain Fund | 1,20,000 | 2,96,258 | 17.21 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #5: Kotak Tax Saver Fund
Launched in November 2005, Kotak Tax Saver Fund currently has an AUM of Rs 4,051 crore. In the last 10 years, Kotak Tax Saver Fund grew at an XIRR of 17%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 2,92,979. The fund’s stock holdings include ICICI Bank, SBI, Maruti Suzuki India, ITC, and Axis Bank.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| Kotak Tax Saver Fund | 1,20,000 | 2,92,979 | 17.01 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #6: DSP Tax Saver Fund
Launched in January 2007, DSP Tax Saver Fund currently has an AUM of Rs 11,805 crore. In the last 10 years, DSP Tax Saver Fund grew at an XIRR of 16.9%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 2,91,930. The fund’s stock holdings include ICICI Bank, HDFC Bank, SBI, Axis Bank, and Infosys.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| DSP Tax Saver Fund | 1,20,000 | 2,91,930 | 16.94 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Top-performing ELSS (Tax Saving Mutual Fund) on 10-Year SIP Returns #7: Canara Robeco Equity Tax Saver Fund
Launched in February 2009, Canara Robeco Equity Tax Saver Fund currently has an AUM of Rs 5,979 crore. In the last 10 years, Canara Robeco Equity Tax Saver Fund grew at an XIRR of 16.3%. A monthly SIP of Rs 1,000 over a 10-year period (i.e. total investment of Rs 1,20,000) would now be valued at Rs 2,82,674. The fund’s stock holdings include HDFC Bank, ICICI Bank, Infosys, Reliance Industries, and SBI.
| Scheme Name | Total Amount Invested (Rs) | Present Value (Rs) | 10-Year XIRR (%) |
| Canara Rob Equity Tax Saver Fund | 1,20,000 | 2,82,674 | 16.34 |
Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Data as of September 01, 2023
Returns are XIRR in percentage
Monthly SIP of Rs 1,000 over a 10-year period in Direct plan – Growth option considered
(Source: ACE MF, data collated by PersonalFN)
Click here to read our detailed analysis of Canara Robeco Equity Tax Saver Fund.
Who should invest in ELSS (Tax Saving Mutual Funds)?
Even though ELSS (Tax Saving Mutual Fund) has various benefits, it may not be suitable for all types of investors. Being equity-oriented, the category has high return potential, but at the same time, they are susceptible to market volatility. As mentioned earlier, the returns on Tax Saving Mutual Funds are not fixed but are market-linked. Thus, only investors who can bear short-term volatility in the equity market, hold a high risk appetite, and have an investment time horizon of at least 3-5 years should consider investing in Tax Saving Mutual Funds.
Bear in mind that investments in equities take time to grow and generate meaningful returns. This means that there can be short-term underperformance. As a result, investors may have to hold on to your investment beyond the mandatory lock-in period of three years.
Related links:
Should You Kick-start Your SIPs Amid Market Highs? Find Out Now
Market at All-time High: How to Select the Best Mutual Funds for SIP Investment Now?
7 Top Performing Mutual Funds Based on 10-Year SIP Returns
7 Top-Performing Mid Cap Mutual Funds with High Returns on 10-Year SIP
7 Top-performing Small Cap Mutual Funds with High Returns on 10-Year SIP
7 Top-performing Large Cap Mutual Funds with High Returns on 5-Year SIP
7 Top-performing Flexi Cap Mutual Funds with High Returns on 10-Year SIP
Note: This write-up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme-related documents carefully.
This article first appeared on PersonalFN here
