Mutual Fund Returns: These 10 ELSS schemes beat the benchmark index in the past 5 years

Before investing in a mutual fund scheme, investors often weigh the pros and cons of a slew of factors. These include macro-economic considerations, category of scheme, past performance of fund house and that of fund manager (s) and importantly – the historical performance of the scheme to invest into vis-à-vis other schemes in the same category.

Here, we share the past performance of equity linked savings schemes (ELSS), and short list the ones which have managed to beat the benchmark index. Upon closer examination, we have concluded that there are 10 such schemes, which managed to beat their benchmark index in the past five years.

What is a benchmark index?

A benchmark index is a standard against which the performance of a mutual fund can be evaluated. Two benchmark indices used to evaluate the performance of ELSS schemes in the table below are NIFTY 500 TRI and BSE 500 TRI. Let us now understand what exactly ELSS funds are.

What are ELSS funds?

ELSS refers to the mutual fund schemes which invest a minimum of 80 percent of their assets in stocks in accordance with Equity Linked Saving Scheme, 2005, notified by the Ministry of Finance.

These schemes have a lock-in period of three years (shortest amongst all other tax-saving options). Investment in these schemes entitles taxpayers to claim deduction under Sec 80C of the Income Tax (I-T) Act up to a maximum of ₹1,50,000 in a financial year.

(Source: AMFI, returns as on Feb 6, 2024)

As we can see in the table above, highest CAGR (compound annual growth rate) returns were delivered by Quant ELSS Tax Saver Fund (31.58 per cent), whereas the benchmark index return was 18.31 percent.

Other ELSS schemes have given annualised returns in the range of 18-25 percent whereas the benchmark index stands at 18.48 per cent. Bank of India ELSS Tax Saver Fund delivered 25.17 per cent while Canara Robeco ELSS Tax Saver gave 18.76 per cent.

It is vital to know that the past returns of a mutual fund scheme do not guarantee its future returns by any means. So, it is recommended to speak to a Sebi-registered investment advisor for making investment related decisions.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.