Due to the 3-year lock-in period and higher potential return compared to other tax savings programs such as PPF, tax savings fixed deposit, National Savings Certificate (NSC), and others tax saving options under 80CThe Equity Linked Savings Program (ELSS) is the most popular choice for claiming a Section 80C tax deduction. ELSS is basically a flexible limit fund that allows tax deductions up to 1.5 thousand annually. These funds are ideal for portfolio diversification because the fund manager invests unlimitedly in large-cap, mid-cap, and small-cap stocks. One can get a tax deduction of up to Rs. 1,50,000 and save up to Rs. 46,800 a year taxed by investing in ELSS mutual funds if they are in the higher 30% tax bracket, allowing tax savers to create wealth in the long run without incurring much tax burden.
A best performing ELSS fund can be selected based on many factors, including historical return, AUM must be higher, rolling return, is the program’s annual return for the targeted investment term Goals and Returns track and measure how well a mutual fund has managed to deliver returns over time. In addition to the above-mentioned parameters, investors should also consider other ratios such as expense ratio, portfolio turnover ratio, which indicates how often a fund manager buys or sells securities over a period of time. specified time horizon, and liquidity ratios, which measure the risk-adjusted potential return and aid in understanding a fund’s ability to generate returns over a specified time period. Here are the 3 best ELSS funds that are open-ended, direct plan and have received a 5-star rating from Value Research based on the criteria mentioned above.
Mirae Property Tax Savings Fund
Based on the net asset parameter, the fund with the highest net asset value is 11,495 Cr in addition to a 5-star rating from Value Research. And based on 3-year returns, the fund generated a 19.61% return and a 5-year return of 15.93%. Based on annual or scheduled returns, the fund has generated 37.15% lower returns than the Bank of India’s Tax Advantage Plan and Tax Advantage Fund. However, Mirae Asset Tax Saver Fund has a 1-year rolling return of 18.6%, higher than peers such as Quant Tax and Canara Robeco Equity Tax Saver Fund. The fund’s expense ratio of 0.57% is lower than most other ELSS funds and it has a NAV of 31.7. The top five holdings of the fund are HDFC Bank Ltd., ICICI Bank Ltd., Infosys Ltd., Reliance Industries Ltd. and Axis Bank Ltd. . The investment model of the fund is 59.94% large-cap companies, 11.56% mid-cap stocks and 6.57% small-cap stocks.
Canara Robeco Equity Tax Savings Fund – Direct Plan
Based on Value Research 5-star rated ELSS funds, the Canara Robeco Stock Tax Savings Fund – Direct Plan has an AUM of 3602.19 Cr is the second largest on the list. The fund has generated returns of 18.96% in 3 years and 15.36% in 5 years. Based on annual or calendar returns, the fund generated 36.81% less than the Bank of India Tax Advantage Plan and Tax Advantage Fund. However, the fund has an average circulating return of 15.3%, which is much higher than the Quantity Tax Plan. The fund has an expense ratio of 0.66%, which is lower than most other ELSS funds and the current NAV is 114.82. The fund’s top five holdings are ICICI Bank Ltd., Reliance Industries Ltd., Infosys Ltd., HDFC Bank Ltd. and State Bank of India. The fund’s asset allocation covers the financial, technology, energy, capital goods, and automotive sectors. The fund’s investment contribution accounted for 61.46% in large-cap companies, 15.9% in mid-cap stocks and 5.65 in small-cap stocks.
Direct growth quantity tax plan
In addition to the 5-star rating, the fund has an AUM of 1,359 Cr is much higher than Bank of India Tax Abuse Fund. Based on long-term returns, the fund generated the highest in the category with 33.69% in 1 year and 21.05% in 5 years. The fund also holds the highest scheduled return of 63.27% and an average rolling return of 20.7% over a year, much higher than the two funds above. However, the fund’s spread ratio is 1.10 higher than Canara Robeco Equity Tax Saver and Mirae Asset, which shows that the fund is outperforming its stated peers. The fund has an expense ratio of 0.57%, which is lower than other funds in the same portfolio, and its current NAV is 226.97. The top 5 holdings of the fund are ITC Ltd., State Bank of India, ICICI Bank Ltd., Patanjali Foods Ltd. and Adani Enterprises Ltd. The investment form of the fund is 18.61% mid-cap stocks and 12.42% small-cap stocks.
