56% ELSS mutual funds fail to beat their benchmarks in three years

Around 56% of ELSS or tax-saving mutual funds have failed to beat their respective benchmarks in the last three years. Of the 36 ELSS funds active in the period, 20 have failed to outperform their respective benchmarks. In other words, only 16 funds in the category have managed to beat the benchmarks.

Aditya Birla SL ELSS Tax Saver Fund offered 13.67% returns in the last three years against 20% by its benchmark (NIFTY 500 - TRI). Canara Rob ELSS Tax Saver also failed to outperform its benchmark.

The scheme delivered 17.06% returns compared to 19.99% by its benchmark (BSE 500 - TRI).



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Axis ELSS Tax Saver Fund, the largest fund in the category based on assets managed, failed to beat its benchmark. The scheme gave 10.80% returns in the last three years against 20% by its benchmark (NIFTY 500 - TRI). The scheme manages assets worth Rs 38,278 crore as of July 2024.

Mahindra Manulife ELSS Tax Saver Fund offered a 17.84% return in the last three years against 20% by the benchmark (NIFTY 500 - TRI). Union ELSS Tax Saver Fund delivered 18.26% returns in the period against 19.99% by its benchmark.

Navi ELSS Tax Saver Fund and PGIM India ELSS Tax Saver Fund offered 16.22% and 16.43% returns, respectively, in the last three years. The schemes are benchmarked against NIFTY 500 - TRI, which gave a 20% return in the period.

Outperformers

SBI Long Term Equity Fund, the oldest in the category, outperformed against its respective benchmark in the last three years. The scheme gave a 28.93% return compared to 19.99% by the benchmark (BSE 500 - TRI).



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In the said period, Kotak ELSS Tax Saver Fund gave 20.81% return against 20% by its benchmark (NIFTY 500 - TRI). Parag Parikh ELSS Tax Saver Fund gave 21.44% in the last three years against 20% by its benchmark.

HDFC ELSS Tax Saver and Quant ELSS Tax Saver Fund gave 25.95% and 27.56% returns, respectively, in the said period compared to 20% by their respective benchmark (NIFTY 500 - TRI).

In three years, ELSS schemes gave an average return of around 19.70%. The schemes are benchmarked against NIFTY 500 - TRI and BSE 500 - TRI, which gave 20% and 19.99%, respectively, in the period.

Tax saving or ELSS schemes are recommended to investors looking to save taxes under Section 80C of the Income Tax Act. One can invest a maximum of Rs 1.5 lakh in these schemes and claim tax deductions on it in a financial year. ELSS funds come with a lock-in period of three years. They have the potential to offer superior returns over a long period.

If you are looking for recommendations, check: Best tax saving mutual funds or ELSS to invest in August 2024