As the year-end is approaching, every investor is planning to achieve new investment objectives. Smart investors choose their investment funds wisely.

If you are planning to save income tax under Section 80C of the Income Tax Act, ELSS (Equity Linked Savings Scheme) funds are the right choice for you. This article explains some of the best ELSS fund schemes.

Below  are the top rated  ELSS (Equity Linked Savings Scheme) funds  for the year 2018 :

1. Aditya Birla Sun Life Tax Relief 96

Review:  This Aditya Birla ELSS fund is ideal for investors seeking long-term capital growth. Aditya Birla Sun Life Tax Relief 96 is launched in the year 1996 and currently managed by Ajay Garg.

It has provided considerable higher returns over the period and has outperformed the industry benchmark. In the last 1 year, this fund has grown by 40%. Groww has rated 5 stars for this fund.

Its composition is primarily equity (80% approximately) and the balance is invested in debt and other instruments. The fund is eligible for tax benefits under 80C and has a lock-in period of 3 years.

This fund is known for its diverse portfolio. Similar to the most of the funds, it also has its fund invested in the financial sector at a weight of 18.2%. But other sectors such as consumer goods has seen a rise from 17.1% to 20.2% over the period in the investment allocation for this fund.

Other sectors in which this fund is invested in are the pharma, services, industrial manufacturing, fertilizers, and pesticides, etc

Since 2006, it is been managed by Ajay Garg and the fund has performed really well. However, it performed bearly in the US recession period of 2008 and also in the year 2011. But if the returns are compared over the period, the returns had outweighed those bear trends.

Ajay Garg is well-renowned fund manager in mutual fund industry and also manages 7 other funds such as Aditya Birla Sun Life MNC FundAditya Birla Sun Life Tax Plan, and Aditya Birla Sun Life Savings Fund.

This fund is our top pick for best elss funds for 2018.

Facts:

AUM ₹4349 Cr
NAV ₹31.43
Expense Ratio 2.32%
Minimum SIP ₹500
Return 1Y 40.42%
Return 3Y 17.69%
Return 5Y 21.69%

2. Reliance Tax Saver Fund

Review:

Reliance Tax Saver Fund has performed well over the recent years. The fund was launched in the year 2005. It has completed more than a decade and has an astounding rate of 16.42% return over this period.

In the beginning, this fund focused primarily on mid-cap funds but over the time it has changed its major composition towards large cap funds.

The fund currently invests 59.8% of its capital in large-cap funds and 29.5% in mid-cap funds. However, the fund claims to maintain the balance between large-cap and mid-cap funds.

The success of this fund is many a time attributed to its fund manager, Ashwani Kumar. He has been managing the fund since its inception. Ashwani Kumar also manages some other popular mutual funds other than this fund. Reliance Vision Fund and Reliance Top 200 Fund are some of those popular funds.

The majority of the assets of this fund are invested in financial services (22.1%) and industrial manufacturing sector (22.2%). Other sectors in which the capital of the fund is invested are cement & cement products, metals, and IT.

Facts:

AUM ₹10157 Cr
NAV ₹66.69
Expense Ratio 1.98%
Minimum SIP ₹500
Return 1Y 39.4%
Return 3Y 13.97%
Return 5Y 22.33%

 

3. IDFC Tax Advantage (ELSS) Fund

Review:

IDFC Tax Advantage (ELSS) Fund was started on 26th December 2008. Since it has given mind-blowing returns to investors.

The fund is one of those few funds which managed to stand on the positive returns side even during the bear market of 2011. This IDFC ELSS focuses mainly on the small and mid-sized companies to identify the potential trends.

The fund has increased the allocation towards mid-cap funds from 36.2% to 40% over the year. The balance is invested in large-cap (44.4%) and small cap (15.5%) funds.

Similar to the most of the funds, it has its highest allocation in the financial services sector. The allocation weight is 23.4%. The other sectors in which this fund is invested in higher proportion are consumer goods (14.6%) and automobile sector (13.5%).

The fund is currently being managed by Mr. Daylynn Pinto. He is the fund manager since October 2016. The other fund which is managed by Daylynn Pinto is IDFC Sterling Equity.

Facts:

 

AUM ₹798 Cr
NAV ₹57.72
Expense Ratio 2.32%
Minimum SIP ₹500
Return 1Y 48.36%
Return 3Y 18.23%
Return 5Y 21.06%

4. DSP Black Rock Tax Saver Fund

Review:

DSP Black Rock Tax Saver Fund has given considerable higher returns to investors since inception. This DSP BlackRock ELSS fund was started in the year 2007 and has provided approximately 15.32% returns over the period.

However the fund saw the downward trend in the year 2007 and 2011, but in the bull market years, the returns counter the effects from the bear period.

The growth of this fund is attributed to the investment in fundamentally strong companies. The fund is managed by Rohit Singhania. Prior to joining DSP Black Rock, he has worked with HDFC Securities Ltd. And IL &FS Investsmart limited.

The fund holds large allocation (71.5%) in the large-cap companies. These companies are already proven in the market and have displayed an excellent performance record.

The balance is invested in the midsized companies (27.8%). The fund restricts its investments to a very smaller extent when it comes to the small size companies.

Financial service sector holds the largest allocation (36.9%) in the fund. The other sectors in which this fund is invested in higher proportion in order are energy (12.7%), automobile sector (9.9%) and consumer goods ( 7.2%)

Facts:

AUM ₹3571 Cr
NAV ₹47.709
Expense Ratio 2.51%
Minimum SIP ₹500
Return 1Y 32.91%
Return 3Y 16.73%
Return 5Y 20.48%

 

5. ICICI Prudential Long Term Equity Fund

Review:

ICICI Prudential Long Term Equity Fund was started in the year 1999. Since then, it has given considerable returns to investors. In the last one year, it has given returns at a rate of 24.22%

This Fund focuses mainly on the large and midsized companies to identify the potential trends. The fund has increased the allocation towards large funds to 58.3% over the years. The balance is invested in mid-cap (38.5%) and a very small proportion is invested in small-cap (3.2%) funds.

Similar to the most of the funds, ICICI Prudential Long Term Equity Fund has its highest allocation in the financial services sector. The allocation weight is 29.1%. The other sectors in which the fund has invested are energy (14.6%), pharma (10.6%), consumer goods (9.3%), etc

The fund is currently being managed by Mr. George Heber Joseph. He is the fund manager since April 2015. The other funds which are managed by George are ICICI Prudential Growth Fund, ICICI Prudential Child Care Plan, ICICI Prudential Value Fund. He manages a total of 8 mutual funds.

 Facts:

AUM ₹4841 Cr
NAV ₹352.71
Expense Ratio 2.31%
Minimum SIP ₹500
Return 1Y 24.22%
Return 3Y 11.14%
Return 5Y 17.62%

 

6. Kotak Taxsaver Regular

Review:

Kotak Tax saver fund is also another open-ended equity linked saving scheme (ELSS) fund. The objective of the fund is to provide tax rebate and stable returns to the investors.

The fund has performed well over the years. It was launched in November 2005 and hence, completed more than a decade in the mutual fund industry.

This fund has given annualized returns of 12.75% over the period. Kotak Tax saver fund has been given a 4-stars rating by Groww on a scale of 5.

Its composition is primarily large-cap and mid-cap companies. Large-cap funds have an allocation of 58.58% and 40.1% of the funds are invested in midsized companies. The fund has an AUM( Asset Under Management) worth 721 cr.

This fund is known for its diverse portfolio. Similar to the most of the funds, it also has its fund invested primarily in the financial sector at a weight of 31%.

The other sectors such as energy, cement and cement products, consumer goods, automobile follow the financial sector in the order of the fund invested.

Kotak Tax saver fund is managed by Harsha Upadhyay. He is managing the fund since August 2015. Prior to joining Kotak Tax Saver, he has worked with DSP Black Rock Investment Managers Ltd. and UTI AMC (Asset Management Company).

The other funds managed by Harsha are  Kotak Opportunities Regular Plan and Kotak Select Focus Fund.

Facts:

 

AUM ₹721 Cr
NAV ₹42.409
Expense Ratio 2.37%
Minimum SIP ₹500
Return 1Y 32.09%
Return 3Y 13.82%
Return 5Y 16.22%

7. Mirae Asset Tax Saver Fund

Review:

Mirae Asset Tax Saver (ELSS) Fund was launched on 28th December 2015. Since then, it has given annualized returns of 16.93% to investors. The fund will be completing 2 years this December.

In a short span of time, it has managed to provide considerable returns. The fund has performed phenomenally over the last 2 years.

Mirae Asset Tax Saver (ELSS) Fund focuses primarily on the large and mid-sized companies to identify the potential trends. Similar to the most of the equity-oriented funds, this fund also has the largest allocation of large-cap funds i.e. 65.5 %. The balance is invested in mid-cap (30.5%) and small cap (4%) funds.

Similar to the most of the funds, it has its highest allocation in the financial services sector. The allocation weight is 31.8%. The other sectors in which this fund is invested in higher proportion are consumer goods (11%)  and automobile sector (11.6%).

The fund is currently being managed by Neelesh Surana. He is the fund manager since the inception of the fund.

The other funds which are managed by Neelesh Surana are Mirae Asset India Opportunities Fund, Mirae Asset Emerging Bluechip Fund, and Mirae Asset Prudence Fund.

Facts:

 

AUM ₹710 Cr
NAV ₹16.701
Expense Ratio 2.54%
Minimum SIP ₹500
Return 6M 13.96%
Return 1Y 45.42%

8. Franklin India Taxshield

Review:

Franklin India Tax shield fund is another ELSS fund suitable for investors looking for tax planning investments. The fund is essentially a diversified equity fund and is more subject to risk and volatility.

However, it has outperformed most of its peers across the time periods.The fund was launched in the year 1999 and hence, remained an all-time mutual fund.

It is a tax scheme mutual fund of the investment group Franklin Templeton Investments. It has an AUM worth 3417 Cr till date and which is a larger asset under management value in comparison to other funds.

Franklin India Tax shield fund is biased towards large cap companies and its allocation percentage has increased over the years to 81.2% which is a very larger figure in ELSS funds. Midsized companies contribute to 18.3% of the portfolio and the rest is invested in small-cap funds (0.5%).

Similar to the most of the funds, it has its highest allocation in the financial services sector. The allocation weight is 35.1%. The other sectors in which this fund is invested in higher proportion are automobile sector (11.6%), energy (14.2%), consumer goods (11%) and Information Technology (6.6%).

The fund is managed by two of its fund managers – Lakshmikanth Reddy and Janakiraman Rengaraju. Since May 2016, both of them have been managing this fund.

Facts:

AUM ₹3417 Cr
NAV ₹555.96
Expense Ratio 2.36%
Minimum SIP ₹500
Return 1Y 26.63%
Return 3Y 12.61%
Return 5Y 18.51%

 

9. HDFC Taxsaver Growth

Review:

HDFC Taxsaver Growth fund has been launched in the same year when Aditya Birla Sun Life Tax Relief 96 was launched i.e. 1996. Even the returns are in the same range 24-26%.

HDFC Taxsaver Growth fund invests primarily in large-cap companies and its allocation percentage has increased over the years to 78.6% which is a very larger figure when it comes to ELSS funds.

Midsized companies contribute to 20.2% of the portfolio and the rest is invested in small-cap funds (1.2%).Similar to the most of the funds, it has its highest allocation in the financial services sector. The allocation weight is 29%.

One important factor about this fund is that is invested 10.4% of the capital in the construction sector which is different from rest of the ELSS funds.

The other sectors in which this fund is invested in higher proportion are automobile sector (8.5%), energy (22.4%), consumer goods (11%) and Information Technology (8.1%).

The fund is currently being managed by Mr. Rakesh Vyas and Mr. Vinay R Kulkarni. Vinay Kulkarni has been managing the fund since 2006. Both fund managers have more than a decade of fund management and equity research experience.

Facts:

AUM ₹7124 Cr
NAV ₹546.055
Expense Ratio 2.19%
Minimum SIP ₹500
Return 1Y 34.16%
Return 3Y 11.53%
Return 5Y 17.77%

10. Motilal Oswal MOSt Focused Long-Term Fund

Review:

Motilal Oswal MOSt Focussed Long Term Fund is a comparatively new ELSS scheme and was launched in the year 2015. However, in such a short span of time, the fund has shown excellent performance.

This Motilal Oswal ELSS fund focuses primarily on the large and mid-sized companies to identify the potential trends.

Similar to the most of the equity-oriented funds, this fund also has the largest allocation to large-cap funds i.e. 65.8 %. The balance is invested in mid-cap (34.2%) funds.

Similar to the most of the funds, it has its highest allocation in the financial services sector. The allocation weight is 42.3%. This is the largest exposure to a particular sector among all the top ELSS funds we have discussed in this article.

The other sectors in which this fund is invested are automobile sector (13.1%), energy (13.3%), pharma (13.7%) and consumer goods (7.1%).

The fund is currently being managed by Gautam Sinha Roy. He has been managing the fund since its inception. The other funds managed by Gautam Sinha Roy are Motilal Oswal MOSt Focussed Multicap 35 Fund and Motilal Oswal MOSt Focussed Dynamic Equity Fund.

 Facts:

AUM ₹738 Cr
NAV ₹17.7715
Expense Ratio 2.65%
Minimum SIP ₹500
Return 6M 9.87%
Return 1Y 41.23%

 

Investors can also invest in these funds through Systematic Investment Plan (SIP) to minimize the market risk.  These funds are a great way to save tax on your hard earned money.

Also, do check out our list of top 30 funds for 2018.

The first 3 funds in the above list are a part of Groww 30: Top funds in every mutual fund category or 2018. 

Happy investing!

Disclaimer: the views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document before investing.