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Yogi Zone

Useful articles for your finance management by our team of experts

Best ELSS funds to invest in 2013-14

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Also read: Top Performing ELSS Schemes in 2012-13

best elss fundsMarch is fast approaching and so is the deadline to look out for investment in tax saving schemes. Section 80C, Section 80D, Section 24, etc help an individual in saving tax up to a certain extent. ELSS is a financial product designed to give you just what you wanted – Returns + Tax Savings.

You can either opt for an SIP or invest a lump sum amount in ELSS funds. Remember that there is a lock-in of 3 years for this product. If you opt for an SIP, each SIP installment will have a 3 year lock-in from the date it is invested for buying units.

Best ELSS funds in 2013-14

Scheme Name

Benchmark Index

Fund Size (in Rs. Crore)

Total Returns Annualized in (%)

Total Expense

Ratio (%)

1 Year

3 Year

5 Year

Axis Long Term Equity

BSE 200

640

13.83

10.14

-

2.85

IDFC Tax Advantage

BSE 200

146

10.9

5.55

-

2.93

Quantum Tax Saving

BSE Sensex

13

8.21

4.33

-

1.25

ICICI Prudential Tax Plan

S&P CNX 500

1363

7.75

4.54

24.9

2.4

Religare Invesco Tax Plan

BSE 100

128

7.68

4.5

21.79

2.88

Source: Value Research Online;Fund size as on Sep 30th, 2013Returns as of Dec 13th, 2013
*Returns up to 1 year are absolute and over 1 year are annualized; *Ratios have been calculated taking 1 Year date range

(We Recommend you to check FundsIndia Expert Picks from Top Tax Saving Mutual Funds)

Axis Long Term Equity

Asset allocation: 97.96% in equities, 0.03% in debt and 2.01% in cash. In equity ~53.57% is invested in large cap and ~44.43% in mid and small cap.

Investment style: Bottom up approach

Top Sectors:  Financial services, technology, healthcare, automobile and FMCG which constitutes around 70% of total portfolio.

Top holdings: L&T, HDFC Bank, Kotak Mahindra Bank, HDFC, TCS and ITC which make up ~36% of net assets in the fund.

Performance: The fund’s 1 year and 3 year returns have been really good. It has outperformed the benchmark since its launch.

IDFC Tax Advantage

Asset allocation: 93.85% in equities, 0.31% in debt and 5.84% in cash. In equity ~52% is invested in large cap and ~48% in mid cap and small cap.

Investment style: Top down approach.

Top Sectors:  Financial, technology, healthcare, FMCG and automobile which constitute around 64% of total portfolio.

Top holdings: Infosys, Tech Mahindra, Biocon, L&T, HDFC Bank and HCL technology which make up ~26.47% of net assets in the fund.

Performance: Ever since launch, it has beaten its benchmark BSE 200 by a big margin. It follows an aggressive approach.

Quantum Tax Saving

Asset allocation: 87.94% in equities, 12.01% in debt instruments and 0.05% in cash. In equity ~63% is invested in large cap and ~37% in mid cap and small cap.

Investment style: Bottom up approach.

Top Sectors:  Energy, financial, automobile, services and technology which constitutes around 64% of total portfolio.

Top holdings: HDFC, Bajaj Auto, Maruti Suzuki India, Infosys, Container Corp. and ONGC which make up ~30% of net assets in the fund.

Performance: The fund just about matches the benchmark in the 1 year returns, but outperforms it in 3 year returns. It is relatively safer in volatile markets.

ICICI Prudential Tax Plan

Asset allocation: 95.62% in equities and rest in debt instruments. In equity ~58% is invested in large cap and ~42% in mid cap and small cap.

Investment style: Mixture of top down approach and bottom up approach.

Top Sectors:  Healthcare, Energy, Technology, Financial services and Metals, which constitute around 68% of total portfolio.

Top holdings: NMDC, Infosys, Tech Mahindra, ICICI bank, Cairn India and HDFC bank which make up ~26% of net assets in the fund.

Performance: Provides moderate aggression by investing up to 40% in mid and small cap stocks. It has beaten its benchmark index by a huge margin in 1 year, 3 year and 5 year returns.

Religare Invesco Tax Plan

Asset allocation: 96% in equities and 4% in cash. In equity, ~51% is invested in large cap and ~49% in mid and small cap.

Investment style: Top down approach.

Top Sectors:  Financial services, energy, technology, services and healthcare which constitute around 63% of total portfolio.

Top holdings: Brittania Industries, TCS, HDFC Bank, HDFC and Maruti Suzuki, which make up ~29% of net assets in the fund.

Performance: It has higher exposure to mid & small cap segment compared to its peers. However, it has beaten its benchmark consistently over 1 year, 3 year and 5 year periods.

Conclusion

ELSS investment is a part of section 80C investments. These investments cannot be redeemed within the 3 year lock-in period. It is advisable to stay invested in these schemes for a longer period, as equities deliver great returns over a longer period.

  • logudotcom

    Good article, thanks

    • Av Suresh

      Thank you.

  • Ashish Banerjee

    Hi I am Ashish-I have invested in Sundram Tax Saver & HDFC Tax saver in the form of SIP of 1000.00 each.Please suggest is it the right ELSS I have gone for.

    • Av Suresh

      Sundaram tax saver hasn’t performed too well. HDFC tax saver has given good 5 year returns. However, as specified in the article, it is not among top 5.

      • Ashish Banerjee

        Thanx for revert.should I go out of the same & invest in these 5 ELSS. or have patience & continue in these 2 ELSS only.

        • Av Suresh

          Do not invest in too many ELSS funds. Choose one ELSS fund and look out for large cap, mid/small cap, debt funds too.

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