ELSS funds is the only category of MF that offers tax deductions, the ceiling of which is Rs 1.5 lakh a year according to Section 80C of the Income Tax Act 1961. All other tax-saving instruments are debt instruments which offer fixed returns that are typically less than that of mutual funds. One can invest more than Rs 1.5 lakh in an ELSS but the excess amount won’t attract tax benefits.
However, ELSS funds invest in equities and, therefore, can generate returns that are far higher than debt instruments over the long term. Just like other mutual funds, investing in these funds in the long-term helps the investor overcome short-term volatility seen in equity markets. Like any other mutual fund, ELSS are managed by professionals from asset management companies (AMC).
Stellar performance
Quant Tax Saver ELSS, one of the stellar performers in this segment, was launched on March 31, 2000. Its NAV as on August 30, 2024 Rs 409.95. Its expense ratio is 1.73% against a category average of 1.84%. The fund size is Rs 11,065.42 crore. It is categorised as Very High in the risk-o-meter.
Lump sum returns
If an investor put Rs 10,000 in this fund 6 months ago, he/she would have got Rs 11,519; 1 year ago it would have generated Rs 15,081; 2 years ago it would have generated Rs 16,969; 3 years ago it would have generated Rs 19,888, 5 years ago it would have given Rs 46,529 and 10 years ago Rs 83,647. If someone had invested since inception (March 31, 2000), the fund would have given him/her Rs 4,03,954.
SIP returns
A monthly SIP of Rs 1,000 in this fund 1 year ago would have generated Rs 14,726; 2 years ago would have generated Rs 34,794; 3 years ago would have generated Rs 57,129, 5 years ago would have generated Rs 1,45,405 and 10 years ago would have returned Rs 4,81,043.
Top stocks, sectors
The top stocks in which this fund has invested include RIL, Adani Power, HDFC Bank, Samvardhana Motherson, Jio Financial, LIC, Britannia, ITC, Tata Power, Jindal Steel.
According to Value Research, among the sectors where this fund is bullish are financial (27.62% of the fund invested), energy & utilities (22.46%), consumer staples (12.35%, consumer discretionary (9.78%), materials (9.25%), healthcare (9.19%).
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ELSS or Equity Linked Savings Scheme is a special kind of mutual fund that allows the investor to claim income tax deduction but has a 3-year lock in. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
