Top 5 Best Performing ELSS Tax Savings Mutual Funds

Top 11 Best Performing ELSS Tax Savings Mutual Funds in India 2020

Mutual Fund is the best way to invest in the stock market and you can also save taxes by investing in Tax Savings Mutual Funds aka ELSS Mutual Funds.

ELSS (Equity Linked Savings Scheme) a.k.a. Best Tax Savings Mutual Funds offers double benefits of tax deduction u/s 80C and capital appreciation. ELSS Funds comes with the lowest lock-in-period (3 years) among the investment list of section 80C.

Please note that deduction of investment in ELSS Funds comes under the threshold limit of Section 80C which also includes other investment avenues such as PPF, NSC, KVP, and SSA.

You will learn about top 11 best ELSS tax saving mutual funds in India. Along with that I am going to share the details of top ELSS Funds and How to select an ELSS Fund in the end. Keep reading till end to dig deep into ELSS Funds.

Read: How to invest in Mutual Funds

Top 11 Best ELSS Tax Savings Mutual Funds in India

Fund Name
Return based on Investment Tenure
1 Year 3 Year 5 Year
Axis Long Term Equity Fund 21.77% 15.44% 10.55%
Invesco India Tax Plan 12.40% 13.55% 10.92%
BOI AXA Tax Advantage Fund Growth 22.20% 13.40% 9.60%
Canara Robeco Equity Tax Saver Fund 11.60% 12.82% 7.64%
BNP Paribas Long Term Equity Fund (ELSS) Growth 17.20% 11.90% 7.90%
Tata India Tax Savings Fund Regular Growth 13.10% 11.80% 11.20%
Aditya Birla Sun Life Tax Relief 96 6.27% 11.50% 8.50%
Motilal Oswal Long Term Equity Fund 19.48% 10.85% 13.12%
Kotak Tax Saver 16.27% 10.45% 8.44%
ICICI Prudential Long Term Equity Fund 9.38% 9.58% 7.16%
SBI Magnum Constant Maturity Fund Regular Growth 14.31% 9.50% 9.94%
DSP Tax Saver Fund Growth 15.44% 9.03% 9.66%

Another plan that is worth mentioning here is the Mirae Asset Tax Saver Fund with a 15.93% return in 3 years. I haven’t included in the list because it is just 4 years old but it has outperformed every other ELSS fund in the list.

Read: 10 Best SIP Mutual Funds in India to Invest in 2020

#1. Axis Long Term Equity Fund

Reasons to Invest: Axis Long Term Equity Fund is a clear winner amongst the ELSS Tax Savings Mutual Funds category (not considering Mirae Asset Tax Saver in the competition). Axis Long Term Equity Fund has given a return of around 21.50% over the past 10 years. The AUM of the fund is as high as Rs.5,879 crores and the expense ratio of the fund is at par with other funds at 2.46%.

Fund Allocation: Axis Long Term Equity Fund portfolio allocation comprises 3.50% of debt instruments and remaining 96.50% of equity. The fund has maintained a 55-60 % of large-cap stocks, 35-40% of mid-cap stocks, with a marginal small-cap allocation. The mid-cap weights are higher than peers.

#2. Aditya Birla Sun Life Tax Relief 96

Reasons to Invest: Aditya Birla Sun Life Tax Relief 96 is more than 2 decades old mutual fund consistently beating its benchmark S&P BSE 200. This fund is able to generate a 28% return over the last 10 years. The AUM of the fund is as high as Rs.2,034 crores and the expense ratio of the fund is at par with other funds at 2.36%.

Fund Allocation: Aditya Birla Sun Life Tax Relief 96 has a major proportion of around 55% of large-cap stocks in its portfolio. The mid-cap stock comprises around 30% and small-cap stocks are just around 15%. This fund has no debt instruments in its portfolio.

#3. BOI AXA Tax Advantage Fund

Reasons to Invest: BOI AXA Tax Advantage Fund is given a decent return of 17.42% in the last 10 years. The AUM of the fund is Rs.266 crores and the expense ratio of the fund is at par with other funds at 2.65%.

Fund Allocation: BOI AXA Tax Advantage Fund portfolio consists of 58% of large cap stock with 33% of mid-cap stock. Remaining 9% is allocated into debt instruments.

#4. Invesco Tax Plan

Reasons to Invest:  Invesco Tax Plan is a decade old fund that manages to give returns of 15.30% in the long-run of 10 years. The AUM of the fund is at a moderate level of Rs.260 crores and the expense ratio of the fund is at par with other funds at 2.87%.

Fund Allocation: The portfolio is mostly invested with a 50-55% large-cap weight at most times with few giant caps which are balanced out by a higher 35-40% mid-cap exposure. The debt instruments are meager of 5% in the portfolio.

#5. Canara Robeco Equity Tax Saver Fund

Reasons to Invest: Canara Robeco Equity Tax Saver Fund manages to post returns of almost 14.51% in the last 10 years. The AUM of the fund is at a High level of Rs.1005 crores and the expense ratio of the fund is at par with other funds at 2.31%.

Stock Mix: The portfolio is mostly filled with an equity investment of 96.9% leaving a tiny space of 3% for debt instruments. Both Giant and large-cap stocks find the highest 80% space in the portfolio. Mid-cap stocks have a proportion of 18% with 2% of small-cap stocks.

How to select an ELSS Tax Savings Mutual Funds

I have considered following points in ranking ELSS Funds

Past Performances

Consistent Return over a long term of 3 to 5 years has been considered in ranking top 5 ELSS Funds.

Asset under Management (AUM)

You can consider schemes having AUM above Rs.250 crores, as high net assets win trust of the investors.

CRISIL Ratings and Value Research Online Rankings

Always go with Schemes having CRISIL Ratings of 1 (5 stars) & 2 (4 stars) and VRO rankings of 4 stars & 5 stars.

Expense Ratio

Expenses Ratio is passed on to the customers so funds should have minimum expense ratios.

Stock Portfolio and Risk Parameters

You can check the stock allocation of Funds before adding them to your portfolio. Large-cap funds are more secure as compared to small-cap or penny stocks.

Fund Manager and Fund Houses

You can also consider the association of the Fund Manager with the same mutual fund scheme and also the trustworthiness of fund houses.

Read: Best Debt Mutual Funds in India

Important points related to ELSS Funds

  1. To invest in ELSS Funds, DEMAT Account is not required. You can simply approach the fund house and apply it. Once you are allotted a folio number, you can start your investment as lump-sum or SIP.
  2. Lock-in-period of 3 years does not mean that you can stay invested only for 3 years. ELSS Funds are open-ended scheme and can be continued for 10 years.
  3. Withdrawal before 3 years attracts tax, so avoid withdrawal before 3 years or say 5 years because equity investment tends to give better returns in the long term.
  4. Do not put all your money at once, go for the SIP method to avail the Rupee Cost Averaging Advantage.

How did you like the article, please tell me in the comments?

2 thoughts on “Top 11 Best Performing ELSS Tax Savings Mutual Funds in India 2020”

  1. Usually, the best performing ELSS schemes are evaluated using certain parameters such as expense ratio, fund manager, and fund houses, stock portfolio, and risk parameter etc. The top 5 best performing ELSS schemes in India at the moment include Axis Long Term Equity Fund, Franklin India Tx Shield Fund, Birla Sunlife Tax Relief 96, IDFC Tax Advantage (ELSS) Fund ? Regular Plan and Religare Invesco Tax Plan.

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