Best ELSS Mutual funds 2021 – Top ELSS Tax Saving Mutual Funds

Top Performing ELSS Mutual Funds to Invest in 2021

ELSS Funds are mutual funds that invest across different market capitalization categories. What makes these funds different from multi cap funds is that investments upto Rs. 1,50,000 in ELSS is eligible for deduction from taxable income under section 80C of the Income Tax Act. 

Market Capitalization is defined as the market value of all outstanding shares and is achieved by multiplying the total number of shares outstanding by the market price per share.

Some of the characteristics of a ELSS Mutual fund are as follows:

  • They provide a diversification since they invest across large caps, mid caps and small caps
  • Lower expected volatility
  • Suitable for investors with medium risk appetite
  • Highly suitable for clients looking to invest in tax saving options
  • They have a lock-in period of 3 years
  • Fund manager has the leeway to increase allocation to a particular category based on market view

The following are the top-rated ELSS mutual funds as per ZFunds scoring for the quarter ended Sept. 2020. The funds with the highest ZF Score (refer methodology here) are ranked at the top. The complete list of funds can be seen in the Annexure at the end of this article.

List of Best ELSS Mutual Fund

Fund NameAUM (in  Crores)1-Year Return3-Year Return5-Year Return
DSP Tax Saver Fund7,01512.276.0712.72
Axis Long Term Equity Fund25,61816.9011.6213.88
Kotak Tax Saver Fund1,44513.036.8912.10
Canara Robeco Equity Tax Saver Fund1,33323.7212.2613.40
Invesco India Tax Plan Fund1,28015.417.7812.06
IDFC Tax Advantage (ELSS) Fund2,51216.672.5010.85
L&T Tax Advantage Fund3,36011.042.5810.71
SBI Long Term Equity Fund8,18515.463.508.59
HDFC Tax Saver Fund7,2632.94-1.697.27
Franklin India Taxshield Fund4,0537.363.088.23

*Returns as of 23 December 2020 and AUM as of 30 November 2020.

1. DSP Tax Saver Fund

DSP Tax Saver Fund is the top fund in the ELSS category. This fund has consistently outperformed its benchmark as well as category average returns over the longer periods.

DSP Tax Saver Fund is ranked among the highest in the parameters of consistency, valuations, and concentration as per the ZFunds ratings.

DSP Tax Saver Fund is a good choice in the category with the perspective of long-term investment for higher returns.

  • ₹10,000 invested in December 2015 would have been approx. Rs.17,800.
  • ₹1,000 invested in monthly SIP since January 2016 would have been approx. ₹81,600.

2. Axis Long Term Equity Fund

A Top-performing fund, Axis Long term equity fund has consistently outperformed its benchmark as well as the category average returns in the last 10 years with significant margins.

The fund is amongst the highest scorers in various metrics like Capture ratio, Risk-adjusted score & Consistency as per ZFunds Ratings.

Axis Long Term Equity Fund is an excellent choice in the ELSS category given its consistency & management of downside risks.

  • ₹10,000 invested in December 2015 would have been approx. Rs.18,700.
  • ₹1,000 invested in monthly SIP since January 2016 would have been approx. ₹88,600.

3. Kotak Tax Saver Fund

A fund that has outperformed its benchmark consistently over the medium to long periods. 

The Fund is amongst the highest scorers in the parameter of consistency (of generating alpha in the last 5 years) & a good score in concentration in the ELSS category. Also, it has been one of the highest scorers in the very important parameter of volatility, thereby taking the fund into the Top 3 ELSS Funds as per ZFunds Ratings.

Kotak Taxsaver Fund is an ideal Tax saving fund for a long-term investment.

  • ₹10,000 invested in December 2015 would have been approx. Rs.17,300.
  • ₹1,000 invested in monthly SIP since January 2016 would have been approx. ₹81,400.

4. Canara Robeco Equity Tax Saver Fund

Canara Robeco Equity Tax Saver Fund is among the top 5 funds in the category because of its highest score in various metrics like consistency, performance against benchmark, capture ratio, and risk-adjusted score as per the ZFunds ratings

Canara Robeco Equity Tax Saver Fund has 53 stocks in its portfolio with allocation across market capitalizations and therefore, providing a diversified portfolio.

The fund can be a good choice for investment as it has the potential to offer good returns in the long term.

  • ₹10,000 invested in December 2015 would have been approx. Rs.18,300.
  • ₹1,000 invested in monthly SIP since January 2016 would have been approx. ₹89,500.

5. Invesco India Tax Plan Fund

Invesco India Tax Plan Fund is one of the top performers in the category of ELSS Fund. It has a good score in the various parameters like performance against benchmark, capture ratio, volatility, and consistency score as per the ZFunds ratings.

Invesco India Tax Plan Fund is a good choice in the ELSS category given its good performance against the benchmark and category.

  • ₹10,000 invested in December 2015 would have been approx. Rs.11,500.
  • ₹1,000 invested in monthly SIP since January 2016 would have been approx. ₹82,700.

More Information:

Difference between ELSS and ULIP
ELSS VS PPF - Comparison, Tenure, Risks, Returns, Tax Benefits
List of Best large cap mutual funds to invest in India
List of Best Small Cap Mutual Funds to invest in India
List of Best Multi Cap Mutual Funds to invest in India
Tips to Invest in Mutual Funds
Best Mutual Funds to Invest in for Long Term in India
Difference between Large Cap, Mid Cap and Small Cap Funds
Bharat Bond ETF - Meaning, Benefits, Price, Interest Rate, Review

Last Updated: 28-Dec-2020

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