ELSS funds are Equity Linked Savings Scheme where an investor gets tax benefits under the section 80C of the Income Tax Act. The fund comes with a lock-in of three years. In this article, we explore 6 best ELSS mutual funds to invest for tax saving in 2019.
#1 Best ELSS Funds – Mirae Asset Tax Saver Fund – Direct Plan – Growth
Launched in Dec 2015, the Mirae tax saver fund is managed by Neelesh Surana, who also manages their flagship Mirae Asset India Equity, Mirae Asset Emerging bluechip and Mirae Asset Hybrid fund. With an Aum of about 1100+ Crores it has an eye-catching expense ratio of 0.36% for direct plans. The fund house has a reputation for good performance and the investment strategy aims to hunt for growth stocks across the market cap.
Mirae Asset Tax Saver doesn’t have a long track history (inception in December 2015), but even then it has comfortably beaten its benchmark since inception – 18.91 percent returns, in comparison to 13.03 of its benchmark index, S&P BSE 200 (TRI).
#2 Best ELSS Funds – Axis Long Term Equity Fund – Direct Plan – Growth
The scheme seeks to generate long-term capital appreciation from a portfolio of diversified equity and related securities with strong growth & a sustainable business model. The fund has generated healthy returns of over 23% over the five-year period.
Consistent performance has led to the fund seeing its asset size burgeon to over Rs 17250+ crore as of May 2018 Jinesh Gopani currently manages the fund since April 2011. The fund is a good multi-cap option should you wish to own quality business.
#3 Best ELSS Funds – ICICI Prudential Long Term Equity Fund – Direct Plan – Growth
The scheme seeks to achieve long-term capital appreciation by investing approximately 90% of the portfolio in equity and related instruments while the remainder in debt and money market instrument and cash. The fund managed to show a good performance returning over 19% returns during the five-year period.
Sankaran Naren & Harish Bihani currently manage the fund and it has a comfortable risk profile when compared to the benchmark or the category and thus making it a good investment for moderately conservative investors.
#4 Best ELSS Funds – IDFC Tax Advantage (ELSS) Fund – Direct Plan – Growth
The fund seeks to build a diversified portfolio comprising of equity and related securities of companies that are fundamentally strong and are available at reasonable valuations. The scheme seeks to invest up to 80% in equity and remainder in debt & money market instruments. The fund generated over 21% returns over the five-year period. Daylynn Gerard Paul Pinto manages the fund since Oct 2016.
The fund has been successful in consistently beating the benchmark over the long-term and is yet to be tested in a severe bear market given it was launched after 2008. The higher mid and small-cap tilt may peg up volatility and thus an investor can take smaller exposures to this fund until a longer track record is at hand.
#5 Best ELSS Funds – L&T Tax Advantage Fund – Direct – Growth
The fund seeks to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities. The fund manager seeks to maintain a balanced approach with beta closer to 1. The fund has generated over 19% returns during the five-year period.
Soumendra Nath Lahiri manages the fund since November 2012. The risk-reward profile of the fund makes it a good investment bet over the long term.
#6 Best ELSS Funds – Aditya Birla Sun Life Tax Relief 96 Fund – Direct Plan – Growth
The fund seeks to follow a multi-cap investing strategy with around 2/3rd allocation to large-cap segment and remainder to the small-and mid-cap segment. The fund seeks to implement the bottom-up 360-degree framework to identify companies that could make it to the list of investments for the portfolio.
The fund generated over 22% returns over the five-year period. Ajay Garg is the fund manager managing the fund since October 2006. The fund has a decent risk-reward profile with fund volatility lower than category average and returns better than category thereby making it a good investment opportunity.