Top ELSS Funds: Equity-Linked Savings Schemes (ELSS), commonly known as tax-saving mutual funds, are becoming a preferred option for investors owing to their dual benefits of tax savings and potentially higher returns. These funds primarily invest in equities and offer better returns than those based on assets like debt or gold. However, with the higher potential for returns comes greater volatility, as equity markets are inherently more unpredictable compared to debt or gold-focused mutual funds. Despite the risks, ELSS remains attractive for those willing to navigate market fluctuations in pursuit of long-term gains. As the investment adage says, "higher risk, higher reward," making ELSS a favoured choice for risk-tolerant investors seeking tax benefits.
It has been generally seen that the true advantage of mutual fund schemes is realised over the long term. However, several ELSS funds have delivered exceptional returns even over a short period of one year. Below are five ELSS schemes that have provided remarkable returns of up to 81 per cent in the past year, along with tax benefits.
SBI long-term equity fund
The State Bank of India's long-term equity fund has delivered a return of 56.94 per cent to its investors over the past year. The current size of this ELSS fund from SBI is Rs 28,000 crore.
DSP ELSS tax saver fund
The DSP ELSS tax saver fund has offered a 57.09 per cent return in the past year. Its current fund size stands at Rs 17,488 crore.
HSBC ELSS tax saver fund
HSBC ELSS tax saver fund has provided investors with a return of 61.44 per cent over the last year. The fund's current size is approximately Rs 4,421 crore.
JM ELSS tax saver fund
JM ELSS tax saver fund has given a robust return of 63.70 per cent to its investors in the past year. The current size of the fund is Rs 181 crore.
Motilal Oswal ELSS tax saver fund
Motilal Oswal ELSS tax saver fund has delivered a massive return of 81.29 per cent in the last year, with a current fund size of approximately Rs 3,984 crore.
ELSS offers tax exemption benefits
It is pertinent to mention here that ELSS is a category of mutual funds that stands for Equity-Linked Savings Scheme. As the name suggests, these funds are linked to equities. The returns from ELSS investments qualify for tax exemption under Section 80C of the Income Tax Act, 1961. ELSS funds come with a lock-in period of 3 years, with 80 per cent of the investment allocated to equities.
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