Top 7 ELSS Funds Deliver Big Gains As Rs 20 Lakh Becomes Over Rs 70 Lakh In Five Years
Equity Linked Savings Schemes (ELSS) have emerged as one of the most effective tools for individuals seeking to build long-term wealth while enjoying tax benefits under Section 80C of the Income Tax Act. These funds invest primarily in equities and related instruments, ensuring the potential for capital appreciation over time. According to experts, the combination of a three-year lock-in period and market-linked returns makes ELSS an ideal choice for disciplined investors under the old tax regime.
The mandatory three-year lock-in period encourages a long-term approach, reducing the temptation to withdraw prematurely. Experts note that this duration also aligns well with the typical equity market cycles, giving investors enough time to benefit from potential market upswings.
The Quant ELSS Tax Saver Fund has stood out with an average annualised return of around 28.6 per cent, turning a ₹20 lakh investment into nearly ₹70.3 lakh. Its assets under management are about ₹11,854 crore, while the current net asset value (NAV) stands at ₹424.9.
Following closely, the Motilal Oswal ELSS Tax Saver Fund has generated approximately 26.9 per cent annualised returns in the same period. With assets of ₹4,377 crore and an NAV of ₹60.6, this fund has grown a ₹20 lakh investment to about ₹65.8 lakh.
The HDFC ELSS Tax Saver Fund has delivered 26.3 per cent annualised returns over five years, with a strong AUM of ₹16,645 crore and an NAV of ₹1,576.9, transforming the ₹20 lakh corpus into roughly ₹64.3 lakh.
Similarly, the Bandhan ELSS Tax Saver Fund maintained steady performance, recording an average return of 24.7 per cent. With an AUM of ₹6,948 crore and NAV of ₹179.6, the same investment would have grown to approximately ₹60.3 lakh.
The Franklin India ELSS Tax Saver Fund and the DSP ELSS Tax Saver Fund have both remained competitive, delivering 24.3 per cent and 24.2 per cent annualised returns respectively, each resulting in final values above ₹59 lakh from a ₹20 lakh initial investment.
Additionally, investors can choose between lump sum investments and Systematic Investment Plans (SIPs) to spread contributions over time, mitigating market volatility. Experts suggest that consistency, rather than timing, is key to maximising the benefits of ELSS investments.
Advisors recommend reviewing fund performance periodically and maintaining a diversified approach, combining ELSS with other asset classes to balance risk and reward.
Disclaimer: This article is for information only and should not be considered investment advice. Mutual fund investments are subject to market risks. Investors should consult a qualified financial advisor before making any investment decisions.
Understanding The ELSS Advantage
ELSS funds combine the appeal of mutual funds with the tax advantages of traditional savings instruments. By investing at least 80 per cent of their assets in equity or equity-linked securities, these schemes participate actively in the stock market while offering investors the ability to claim tax deductions of up to ₹1.5 lakh each financial year.The mandatory three-year lock-in period encourages a long-term approach, reducing the temptation to withdraw prematurely. Experts note that this duration also aligns well with the typical equity market cycles, giving investors enough time to benefit from potential market upswings.
Top Performing Funds In The Past Five Years
Several ELSS funds have generated impressive wealth for investors who remained committed over the last five years. Based on recent data, a lump sum investment of ₹20 lakh in some of the leading schemes has seen substantial growth.The Quant ELSS Tax Saver Fund has stood out with an average annualised return of around 28.6 per cent, turning a ₹20 lakh investment into nearly ₹70.3 lakh. Its assets under management are about ₹11,854 crore, while the current net asset value (NAV) stands at ₹424.9.
Following closely, the Motilal Oswal ELSS Tax Saver Fund has generated approximately 26.9 per cent annualised returns in the same period. With assets of ₹4,377 crore and an NAV of ₹60.6, this fund has grown a ₹20 lakh investment to about ₹65.8 lakh.
The HDFC ELSS Tax Saver Fund has delivered 26.3 per cent annualised returns over five years, with a strong AUM of ₹16,645 crore and an NAV of ₹1,576.9, transforming the ₹20 lakh corpus into roughly ₹64.3 lakh.
Strong Performers From Established Fund Houses
Among the larger schemes, the SBI ELSS Tax Saver Fund has also achieved consistent results, posting around 25.95 per cent annualised returns. With a substantial asset base of ₹30,420 crore and an NAV of ₹482.5, this fund turned ₹20 lakh into nearly ₹63.4 lakh during the five-year period.Similarly, the Bandhan ELSS Tax Saver Fund maintained steady performance, recording an average return of 24.7 per cent. With an AUM of ₹6,948 crore and NAV of ₹179.6, the same investment would have grown to approximately ₹60.3 lakh.
The Franklin India ELSS Tax Saver Fund and the DSP ELSS Tax Saver Fund have both remained competitive, delivering 24.3 per cent and 24.2 per cent annualised returns respectively, each resulting in final values above ₹59 lakh from a ₹20 lakh initial investment.
Why Investors Continue To Prefer ELSS
Financial experts emphasise that ELSS funds offer one of the shortest lock-in periods among tax-saving instruments, along with the potential for higher returns due to their equity exposure. The dual benefits of wealth creation and tax saving make them particularly appealing for salaried professionals and self-employed individuals seeking to optimise both investment growth and tax planning.Additionally, investors can choose between lump sum investments and Systematic Investment Plans (SIPs) to spread contributions over time, mitigating market volatility. Experts suggest that consistency, rather than timing, is key to maximising the benefits of ELSS investments.
Long-Term Strategy And Market Outlook
As markets continue to evolve, experts believe that ELSS funds remain suitable for those with a long-term horizon and moderate risk appetite. The past five-year performance of these top funds reflects strong portfolio management and favourable market conditions. However, future returns may vary based on market trends, interest rate cycles, and global economic movements.Advisors recommend reviewing fund performance periodically and maintaining a diversified approach, combining ELSS with other asset classes to balance risk and reward.
The Bottom Line
ELSS funds continue to attract investors who aim to combine tax efficiency with equity market growth. The recent five-year data clearly shows how disciplined investing and patience can lead to significant wealth creation. However, as with any market-linked product, performance is not guaranteed and depends on multiple economic and company-specific factors.Disclaimer: This article is for information only and should not be considered investment advice. Mutual fund investments are subject to market risks. Investors should consult a qualified financial advisor before making any investment decisions.
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