BackThese twelve tax-saving equity mutual funds gave alpha returns in three years. Do you own any of these?
Investments in ELSS, also known as tax-saving equity mutual funds eligible for tax deduction under Section 80C.
PremiumInvestments in Equity Linked Saving Scheme of mutual funds, popularly known as ELSS, are eligible for an income tax deduction under Section 80C of the Income Tax Act, subject to a 3-year lock-in period. ELSS funds, also referred to as tax-saving funds, have the dual advantage of wealth creation as well as tax savings. An investor can claim a deduction of up to ₹1.50 lakh .
According to money experts, investing in ELSS funds in a lump sum can be a mistake as these are equity investments, and the market conditions at the time of your lump sum investment will have a significant impact on your returns.
According to a weekly report by SMC Global Securities Ltd., twelve mutual fund schemes gave alpha returns in three years.
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These tax-saving equity mutual funds gave up to 31% returns in three years
1)SBI Long Term Equity Fund - Growth- 27.80%
2)Motilal Oswal Long Term Equity Fund - Reg - Growth- 26.40%
3)Bank of India Tax Advantage Fund - Eco - Growth- 26.10%
4)HDFC Taxsaver - Growth- 28.20%
5)Bandhan Tax Advantage (ELSS) Fund - Reg - Growth -30.60%
6)Franklin India Taxshield - Growth- 28.70%
7)Parag Parikh Tax Saver Fund - Reg - Growth- 23%
8)DSP Tax Saver Fund - Growth- 26.40%
9)Nippon India Tax Saver (ELSS) Fund - Reg - Growth- 27.90%
10)Kotak Tax Saver Fund - Reg - Growth- 24.70%
11)Mahindra Manulife ELSS Fund - Reg - Growth- 26.40%
12)Mirae Asset Tax Saver Fund - Reg - Growth- 23.80%
What is Alpha return?
Alpha return is a term used in investing to describe when an investment strategy beats the market. So as per the report, if we see the benchmark indices performance for three years- Nifty 50- 20.50%, and S&P BSE Sensex- 20.10%.
Also Read: These small-cap funds gave up to 42% returns in just one year
Equity Linked Saving Scheme (ELSS) Mutual Funds
ELSS Funds are basically equity funds and are thus risky for a short duration. “They have the potential to give you better returns in the long run. Though the ELSS schemes have a lock-in period of only three years, there is no guarantee of positive returns within the lock-in," said tax and investment expert Balwant Jain.
If you are investing in ELSS funds or for that matter in any equity scheme or mutual fund, you should have a minimum time horizon of eight to 10 years, Jain added.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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