Equity Linked Savings Schemes (ELSS) are equity oriented mutual fund schemes where investors are given tax benefits to encourage them to invest in equity markets. Investors in these schemes get the dual benefits of tax savings and an opportunity to earn higher returns. ELSS funds power pack these benefits with a lock-in period as low as 3 years. They also provide substantially higher returns than traditional tax saving products like NSC and PPF. As per Section 80C of the Income Tax Act, investments upto Rs 1 lakh in ELSS is eligible for deduction from an individual’s taxable income. Investors in the highest tax bracket can save upto Rs.30,900 every year by investing in these schemes.
In the ELSS space, few schemes like Can Robeco Equity Taxsaver, Fidelity Tax Advantage and HDFC Taxsaver have proved to be consistent performers since their launch. The fact that these funds have comfortably managed to outperform their peers in the same category as well as their benchmark stands testimony to their impeccable track record. These funds have demonstrated a unique ability to race ahead of their peers when the markets are in an uptrend and contain the downside when market conditions turn sluggish. The lock-in period of 3 years also gives sufficient time for the value unlocking of mid and small cap stocks and gives the fund manager the flexibility to make strategic long term investments in a diversified portfolio chosen after careful fundamental research.
Fund Performance Snapshot - Annualised Returns .
S. No.
|
Scheme Name
|
Rating
|
Current NAV
|
1 Yr
|
2 Yrs
|
3 Yrs
|
5 Yrs
|
Since Inception
|
1
|
Canara Robeco Equity Tax Saver
|
* * * * *
|
17.59
|
-12.07 %
|
10.41 %
|
32.00 %
|
14.71 %
|
15.00 %
|
2
|
Fidelity Tax Advantage Fund
|
* * * * *
|
20.89
|
-14.47 %
|
10.19 %
|
27.88 %
|
12.25 %
|
13.81 %
|
3
|
HDFC Tax Saver
|
* * * *
|
213.45
|
-8.28 %
|
7.12 %
|
27.43 %
|
8.68 %
|
31.27 %
|
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