ELSS Mutual Funds Yield Up to 22% XIRR on SIP Investments within Three Years
With the tax-savings season fast approaching, several investors are in search of Equity-Linked Savings Schemes (ELSS), which have returned well in the last three years. As the funds have a lock-in tenure of three years, their three-year performance assumes significant importance for investors who wish to invest now.
Approximately 11 funds returned over 15% XIRR over the past three years. SBI Long Term Equity Fund, the oldest among the category, returned the maximum XIRR of 22.20% over the past three years. Rs.1,000 SIP monthly in this fund would have been Rs.49,671 today.
The highest return-giving fund was the SBI Long Term Equity Fund, with an XIRR of 22.20% over three years. An investor who had invested Rs.1,000 a month under SIP in this scheme would now have Rs.49,671.
Another among the top-performing ones was HDFC ELSS Tax Saver, which had an XIRR of 19.22%. Then, there was the Motilal Oswal ELSS Tax Saver Fund, which gave an XIRR of 18.88%.
Parag Parikh ELSS Tax Saver Fund also delivered good returns with an XIRR of 16.34% over three years. An SIP investment in the fund on a monthly basis would have become Rs.45,776. Nippon India ELSS Tax Saver Fund yielded an XIRR of 12.56%, and Invesco India ELSS Tax Saver Fund achieved an XIRR of 12.52%.
Kotak ELSS Tax Saver Fund gave an XIRR of 10.86% over a three-year tenure. If an investor had commenced a Rs.1,000 monthly SIP three years ago, the investment amount would be worth Rs.42,321 at present.
Axis ELSS Tax Saver Fund, the largest asset under management ELSS fund, returned an XIRR of 10.34% over the same duration. Mahindra Manulife ELSS Tax Saver Fund returned 9.68%, while Sundaram Diversified Equity Fund returned an XIRR of 9.34%.
Quant ELSS Tax Saver Fund yielded an XIRR of 8.68%, then Navi ELSS Tax Saver Fund at 7.85%. Shriram ELSS Tax Saver Fund gave the least return in the funds that were under consideration, returning an XIRR of 5.34% over a period of three years.
What Are ELSS Mutual Funds?
ELSS or tax-saving schemes enable investors to save income tax under Section 80C of the IT Act. An individual can invest up to Rs.1.5 lakh in a year and claim tax deductions on investments made in a year. ELSS schemes invest in equities and are of high risk. Schemes have a three-year lock-in period. This allows the investors, particularly inexperienced and new investors, to get an experience about the nature of equity markets and the associated volatility.
We took into account all ELSS schemes that can be invested in the market. We took into account regular and growth plans.
Please keep in mind that this study is informational and should not be taken as an investment recommendation. Prior to investment or redemption, investors should always reflect on their investment horizon, investment objectives, and risk tolerance.
