ELSS Funds : What is the best ELSS for you
Equity-Linked Savings Scheme (ELSS) is an equity mutual fund investment that invests at least 80 per cent of its assets in equity and equity-related instruments. ELSS can be open-ended or close ended.
- Tax Deduction under Section 80C:
- This is the main tax benefit of ELSS. Up to ₹1.5 lakh of your investment in ELSS can be deducted from your taxable income under Section 80C of the Income Tax Act.
- Think of it as reducing your taxable income by the amount you invest in ELSS. This translates to a lower tax bill.
- Lock-in Period:
- There’s a catch – you can’t withdraw your ELSS investment for at least 3 years. This is called the lock-in period.
- It’s important to consider your investment horizon (how long you plan to invest) before choosing ELSS. It’s best suited for long-term financial goals.
- Potential for Higher Returns:
- ELSS invests in the stock market, which carries risk but also has the potential for higher returns compared to other tax-saving options like PPF or FDs.
Fund Name | Fund rating ( Crisil rated ) | Portfolio Size ( In Cr ) | Expense ratio | PE ratios | Turn over |
| HDFC ELSS tax saver fund | 5 | 14,474.85 | 1.73 | 19.86 | 22% |
| SBI long term equity | 5 | 23,411.67 | 1.62 | 20.09 | 15% |
| Quant ELSS tax saver fund | 4 | 9,360.89 | 1.76 | 17.73 | 130% |
| Bank of India Tax saver fund | 4 | 1,297.72 | 2.11 | 17.73 | 73% |
| Motilal Oswal ELSS tax saver fund | 4 | 3,402.11 | 1.85 | 35.02 | 74% |
| Franklin India ELSS tax saver fund | 4 | 6,383.38 | 1.81 | 21.59 | 20% |
| Kotak ELSS tax saver fund | 3 | 5,608.21 | 1.77 | 19.21 | 13% |
| DSP ELSS tax saver fund | 3 | 14,859.56 | 1.66 | 16.59 | 35% |
| Mirae Asset ELSS tax saver fund | 2 | 22,471.76 | 1.57 | 21.18 | 84% |
| Canara Robeco ELSS Tax Saver Fund | 2 | 7,760.97 | 1.76 | 23.08 | 24% |
| Axis ELSS Tax saver fund | 1 | 35,641.94 | 1.53 | 34.07 | 17% |
Trailing Returns :
1 Year Returns :
Quant ELSS tax saver , Bank of India ELSS, SBI long term Equity fund and Motilal oswal ELSS tax saver had been the front runner in one year above 50% .
HDFC ELSS tax saver, Franklin India Tax saver, Kotak ELSS tax saver and DSP ELSS tax saver were the next category to have returns in the range of 40%.
Canara Robeco ELSS tax saver, Mirae Asset ELSS tax saver fund , Axis ELSS tax saver were the last range of 30%
3 Years Returns :
SBI long term Equity Fund , Quant ELSS tax saver, HDFC ELSS tax saver returns were in range 26-27%.
Next close were Motilal oswal ELSS tax saver and Bank of India ELSS fund which came close to 23-24% range
Franklin India Tax saver fund , DSP ELSS tax saver fund and Kotak ELSS tax saver fund were returns 20-21%
Mirae Asset ELSS tax saver fund, Canara Robeco ELSS tax saver fund gave return in 16%
Axis ELSS tax saver fund were the last in the category 10%
5 Years Returns
Quant ELSS tax saver was leader in 5 years return with 31.53% followed by not to close but at 25% Bank of India ELSS fund.
SBI Long term equity and Motilal Oswal ELSS tax saver were in next category to give returns 20%
DSP ELSS tax saver fund, Kotak ELSS tax saver fund and Mirae Asset ELSS tax saver fund gave 19% returns.
Canara Robeco ELSS tax saver, HDFC ELSS tax saver, Franklin India Tax saver fund gave returns of 18%
Axis ELSS tax saver fund gave return of 13.75%
10 Years Returns
Quant ELSS tax saver in 10 years returns had the given the 24.79%
Bank of India ElSS fund was next in the category 18.34%
DSP ELSS tax saver and Kotak ELSS tax saver gave return of 17%
SBI Long term equity fund ,Franklin India Tax Saver fund, Canara Robeco ELSS tax saver and Axis ELSS Tax saver fund around 15-16 %
HDFC ELSS tax saver fund was around 14.09
Motilal Oswal ELSS tax saver , Mirae Asset ELSS tax saver fund did not have that much history.
Rolling returns :
We have considered rolling returns of 5 years as ELSS has a lock-in of 3 years .
As an ELSS we generally consider returns above 15% to be a good return delivered by the fund, So any fund which have been able to generate rolling return for 5 years period of 15% and above, for maximum times should be considered a stable fund
We see Quant ELSS Tax saver fund and Mirae Asset ELSS tax saver are in the first quartile, also the Negative side has been limited for both of these funds.
Bank of India ELSS , Canara Robeco ELSS tax saver , DSP ELSS tax saver and Kotak ELSS managed to be above 50% of times in the above quartile. They also managed to be not negative in this period.
Franklin India ELSS Tax saver ,Axis ELSS tax saver fund could keep this returns for almost close to 50% of times. Franklin did Deliver negative return but Axis managed to avoid the negative.
SBI Long term equity, Motilal Oswal ELSS tax , HDFC ELSS fund saver fund have not been consistent in the category of 15% above. HDFC ELSS and SBI long term equity funds had delivered negative returns.
The negative return percentage might be ignored since it was very low.So in this category we need to see which funds are maintaining the highest number in 0-12% .
Motilal Oswal ELSS tax fund , HDFC ELSS Tax Saver fund, SBI Long term fund and Franklin India ELSS Tax Saver for close to 50%of times delivered returns in range of 0-12% . Which shows they have not been very consistent in return.
Axis ELSS tax saver was for at least 30% of time in this range.
Bank of India Tax saver fund , Kotak ELSS Tax saver fund , DSP ELSS tax saver were close to 25 % times in this range .
Canara Robeco ELSS tax saver was almost 20% of the time in this range.
Quant ELSS tax saver and Mirae Asset ELSS tax saver were in low single digit.
VS benchmark
| Fund Name | 1-Yr Ret (%) | 3-Yrs Ret (%) | 5-Yrs Ret (%) | 10-Yrs Ret (%) |
| Bank of India ELSS Tax Saver | 52.94 | 23.32 | 25.21 | 18.3 |
| Quant ELSS Tax Saver | 57.15 | 26.49 | 31.57 | 24.67 |
| HDFC ELSS Tax saver | 44.62 | 25.68 | 17.93 | 14.14 |
| Motilal Oswal ELSS Tax Saver Fund | 51.71 | 24.11 | 20.75 | – |
| SBI Long Term Equity | 54.35 | 26.22 | 21.78 | 16.28 |
| Canara Robeco ELSS Tax Saver | 29.94 | 16.31 | 18.41 | 15.74 |
| DSP ELSS Tax Saver | 41.39 | 19.75 | 19.77 | 17.41 |
| Franklin India ELSS Tax Saver | 41.33 | 20.77 | 17.87 | 15.78 |
| Kotak ELSS Tax Saver | 38.6 | 20.72 | 19.06 | 17.26 |
| Mirae Asset ELSS Tax Saver | 31.75 | 16.34 | 18.86 | – |
| Axis ELSS Tax Saver | 25.01 | 9.98 | 13.07 | 14.88 |
| NIFTY 200 TRI | 31.58 | 17.33 | 16.78 | 14.54 |
1 year
Canara Robeco ELSS Tax Saver, Axis ELSS Tax Saver both the funds could not beat the index, Mirae Asset ELSS Tax Saver was close to index
Kotak ELSS Tax Saver did beat the index
Next category Franklin India ELSS Tax, DSP ELSS Tax Saver, HDFC ELSS Tax saver managed the next category 40%
Motilal Oswal ELSS Tax Saver, SBI Long Term Equity, Bank of India ELSS Tax Saver and Quant ELSS Tax Saver were the leaders in the category
3 year
Axis ELSS Tax Saver, Mirae Asset ELSS Tax Saver ,Canara Robeco ELSS Tax Saver could not beat in the last 3 years
DSP ELSS Tax, Kotak ELSS Tax Saver, Franklin India ELSS Tax Saver did beat index in the next category 19-21 % category
Bank of India ELSS Tax Saver, Motilal Oswal ELSS Tax Saver Fund in category of 23-24%
HDFC ELSS Tax saver,SBI Long Term Equity and Quant ELSS Tax Saver leader with 25-26%
5 year
Axis ELSS Tax Saver could not beat the index in the last 3 years.
Franklin India ELSS Tax Saver , HDFC ELSS Tax saver, Canara Robeco ELSS Tax Saver and Mirae Asset ELSS Tax Saver did beat the index category 17-18%
Kotak ELSS Tax Saver , DSP ELSS Tax Saver, Motilal Oswal ELSS Tax Saver Fund and SBI Long Term Equity were in next category 19-21%
Bank of India ELSS Tax Saver gave 25% but the leader was Quant ELSS Tax Saver with 31%
10 year
HDFC ELSS Tax could not beat the index in 10 years period
Axis ELSS tax saver just managed to get past the index.
Canara Robeco ELSS Tax Saver and Franklin India ELSS Tax Saver gave more than 15% return
SBI Long Term Equity, Kotak ELSS Tax Saver and DSP ELSS Tax Saver are in range of 16-17%
Bank of India ELSS was 18% and Quant ELSS Tax Saver was again leader with 24% return
Ratios:
| FUND NAME | Alpha | Beta | Std deviation | Sharpe Ratio | Sortino Ratio |
| HDFC ELSS tax saver fund | 7.34 | 0.86 | 11.76 | 1.68 | 2.91 |
| SBI long term equity | 7.48 | 0.95 | 13.36 | 1.58 | 2.67 |
| Quant ELSS tax saver fund | 7.41 | 1.06 | 16.64 | 1.36 | 2.13 |
| Bank of India Tax saver fund | 3.99 | 0.98 | 14.34 | 1.26 | 2.25 |
| Motilal Oswal ELSS tax saver fund | 5.45 | 0.94 | 13.85 | 1.36 | 2.52 |
| Franklin India ELSS tax saver fund | 3.33 | 0.93 | 12.75 | 1.31 | 2.19 |
| Kotak ELSS tax saver fund | 3.39 | 0.83 | 11.56 | 1.32 | 2.16 |
| DSP ELSS tax saver fund | 1.73 | 0.93 | 13.04 | 1.16 | 2.19 |
| Mirae Asset ELSS tax saver fund | -0.4 | 0.91 | 12.27 | 1.03 | 1.82 |
| Canara Robeco ELSS Tax Saver Fund | -1.0 | 0.91 | 12.47 | 0.97 | 1.9 |
| Axis ELSS Tax saver fund | -7.55 | 1.03 | 15.56 | 0.47 | 0.86 |
Let’s look at the first category, HDFC ELSS Tax saver , SBI Long term Equity , Quant ELSS tax saver fund, they have been able to generate great alpha which is highest in the category. HDFC ELSS tax saver has been able to manage its low beta , low standard deviation while having great sharpe ratio, Also has highest sortino ratio. SBI Long term Equity has beta close to 1 showing a high volatility and high std deviation, even the sortino is not bad. The quant ELSS tax saver has beta above 1 depicting the high volatility as compared to the market. With low risk protection and higher sortino ratio.
Motilal Oswal ELSS tax saver fund is next but the fund seems to be highly volatile in nature with the .It has been able to beat the index in the last 5 years of existence in the second quartile.
Also the Sharpe ratio suggests that the fund is taking bigger risk . The sortino ratio is doing good.
Bank of India Tax saver fund ,Franklin India ELSS tax saver fund and Kotak ELSS tax saver fund . Bank of India Tax saver fund seems to be taking a lot of risk to generate alpha but still not able to generate alpha as high the first categry. Fund has High beta, high std deviation , low sharpe ratio, low sortino ratio. Franklin India ELSS tax saver fund is volatile to deliver the returns but the sharpe and sortino ratios are quite low. Kotak ELSS tax saver fund is a comparatively stable fund in this second classification and is actually able to deliver returns while being stable.
DSP ELSS tax saver fund is again quite volatile but with risk associated it has not been able to generate the Alpha nor great sharpe ratio. High beta , low sortino ratio also does not help.
Mirae Asset ELSS tax saver fund, Canara Robeco ELSS Tax Saver Fund and Axis ELSS Tax saver fund could not produce alpha.
Fund managers Longevity :
HDFC ELSS tax saver fund :
Hdfc ELSS tax saver is managed by 2 managers, has new fund managers managing the fund for the last 2 years who seem to have taken the fund to a turn around. Though it is a very short period.
SBI long term Equity fund :
SBI Long term Equity is managed by a single manager for the last 8 years. He is also the head of equities.
Quant ELSS tax saver fund
Fund has 2 fund managers who have been managing the fund for close to 5 years now, but the fund managers have a lot of other funds which they are managing.
Bank of India ELSS Tax saver fund
It has only one fund manager managing fund, who is also the CIO , for about 2 years but he has industry experience of about 24 years
Motilal Oswal ELSS tax saver fund
Managed by 3 fund managers but they are again just 2 years with the fund or even low.
Franklin India ELSS tax saver fund
The fund is being managed by 2 managers who have been with the fund for about 8 years.
Kotak ELSS tax saver fund
Kotak ELSS has been managed by its CIO for the last 9 years.
DSP ELSS tax saver fund
It’s being managed by 2 fund managers, one of them has been managing for the last 9 years.
Mirae Asset ELSS tax saver
Mirae asset ELSS is being managed by 1 fund manager who is also CIO for last 8 years
Canara Robeco ELSS Tax Saver
The fund is being managed by 2 managers, one is the head of equities and they have been managing the fund for about 5 years now.
Axis ELSS Tax saver fund
Funds is currently being managed by 2 fund managers with one being the head of equity both took over from its long term fund manager just about a year ago.
Portfolio :
| FUND NAME | Strategy | Top Sectors | Top Stock | No of Stocks | Caps Allocation |
| HDFC ELSS tax saver fund | Growth at reasonable price | Financial : 36.32% Healthcare: 12.82% Technology : 7.61% | ICICI Bank Ltd.: 9.93% HDFC Bank Ltd.: 9.61% Others : 7.01% Axis Bank Ltd. : 6.93% HAL : 5.99% | 40 | Large Cap : 80.08% Mid Cap: 6.79% Small Cap : 4.7% Others : 8.43% |
| SBI long term equity | Value | Financial: 21.54% Energy : 16.55% Capital Goods : 8.16% | Others: 8.27% GE T&D India Ltd. : 4.86 HDFC Bank Ltd. : 3.99 Torrent Power Ltd. : 3.96 ICICI Bank Ltd. 3.64 | 65 | Large Cap : 53.07% Mid Cap : 22.11% Small Cap : 14.6% Others : 10.22% |
| Quant ELSS tax saver fund | Momentum | Energy : 26.72% Financial : 18.03% Metals & Mining: 15.05 | RIL : 9.53 Adani Power Ltd. : 7.58 JIO Financial Services Ltd. : 6.29 Hindalco Industries Ltd. : 5.01 | 39 | Large Cap : 67.53% Mid Cap : 15.18% Small Cap : 9.02% Others : 8.28% |
| Bank of India Tax saver fund | Momentum | Financial :26.1% Energy:10.47% Capital Goods :10.39% Metals & Mining: 10.2% | SBI: 4.43% Canara Bank : 3.57% Vedanta Ltd. : 3.48% Oil India Ltd.:3.35 HDFC Bank Ltd.: 2.99% RIL : 2.94% | 66 | Large Cap: 55.54% Mid Cap : 25.15% Small Cap: 17.39% Other: 1.92% |
| Motilal Oswal ELSS tax saver fund | Growth | Services: 22.31% Capital Goods : 19.58% Financial : 18.29% Healthcare : 10.95% | Zomato Ltd. : 7.13% Trent Ltd. : 6.15% JIO Financial Services Ltd. : 5.6% Prestige Estates Projects Ltd. : 4.67 Indusind Bank Ltd. : 4.46 | 30 | Large Cap : 39.82% Mid Cap : 25.31% Small Cap: 33.4% Others :1.47% |
| Franklin India ELSS tax saver fund | Value | Financial: 25.74% Energy : 9.64% Technology : 9.29% | ICICI Bank Ltd. : 7.94% HDFC Bank Ltd. : 6.78% Bharti Airtel Ltd. : 5.22% Larsen & Toubro Ltd. :5.21% | 49 | Large Cap : 74.76% Mid Cap : 13.63% Small Cap : 6.23% Others: 5.37% |
| Kotak ELSS tax saver fund | Momentum/Growth | Financial : 21.17% Energy : 14.36% Automobile : 11.64% Capital Goods : 11.56 | Maruti Suzuki India Ltd. : 5.14% HDFC Bank Ltd. : 4.74% ICICI Bank Ltd. : 4.31% State Bank of India :3.98 | 59 | Large Cap : 61.84% Mid Cap : 23.97% Small Cap : 12.18% Others : 2.01% |
| DSP ELSS tax saver fund | Growth/ Momentum | Financial : 35.62% Energy :9.11% Automobile :8.44% Healthcare: 7.54% | HDFC Bank Ltd. :7.89% ICICI Bank Ltd. :7.88% State Bank of India :4.66% | 66 | Large Cap :65% Mid Cap: 19.86% Small Cap : 13.5% Others : 1.64% |
| Mirae Asset ELSS tax saver fund | Growth | Financial :29.48% Energy :9.33% Services :9.22% Technology :8.14% | HDFC Bank Ltd. : 8.25% ICICI Bank Ltd. :4.8% Reliance Industries Ltd.: 4.71% Kotak Mahindra Bank Ltd. : 4% | 78 | Large Cap : 63.74% Mid Cap: 17.63% Small Cap: 16.66% Others :2.0% |
| Canara Robeco ELSS Tax Saver Fund | Growth/ Momentum | Financial: 27.09% Technology : 9.59% Automobile : 9.45% Capital Goods : 8.82% Energy : 8.2% | HDFC Bank Ltd :6.64% ICICI Bank Ltd.: 5.97% Reliance Industries Ltd.: 4.46% Infosys Ltd: 4.05% | 69 | Large Cap: 68.86% Mid Cap : 15.88% Small Cap : 10.34% Others: 4.92% |
| Axis ELSS Tax saver fund | Growth | Financial- 22.81% Services- 14.4% Energy- 9.64% Automobile- 8.79% | Torrent Power Ltd.- 7.14% Tata Consultancy Services Ltd.- 5.86% Avenue Supermarts Ltd.- 5.7% Bajaj Finance Ltd.- 5.08% | 57 | Large Cap : 62.61%Mid Cap: 27.16%Small Cap: 1.37% Others: 8.85% |
Energy as a theme seems to be running throughout the ELSS funds. With most funds taking approx 10% exposure in the scheme. As on date most funds with value or momentum exposure had performed.
Conclusion :
This fund category is a prime example of a behemoth fund falling from its peak. Which proves the point: just chasing the best fund may not be the best choice. Also you need an advisor who can help you find the best fund.
As always please discuss with your wealth manager or advisor the funds listed and find the best suited fund. As the funds also go through cycles as they invest into stock market and have a strategy in place.
You can reach us to help you design the bets fund portfolio , so that you get best results according to your need and assessment.( you can reach us : https://wa.me/message/LC5W5ZNTPSJ5L1)
Do look into your asset allocation , if you not set the same read our blog on the same. ( https://wealthinn.in/asset-allocation-guideline-for-investment/). It is very important that you set you asset allocation before investing into any fund.
