ELSS schemes are major concern for the investor who is looking for safe & high returns while availing tax benefits but investing in ELSS is taxing and time consuming affair as Investors are always confused with number of schemes available in the market. People investing in ELSS schemes have a few major agendas, finding right AMC & scheme, consistent high growth and reasonable to slightly low NAV, which enables investor to accumulate more units for long term benefit.
Contrary to the expectations Investors have always been made to believe that higher returns and consistently performing fund schemes over the period of time comes with a very high NAV and if a investor wants to choose right performing Mutual Fund scheme s/he would have to cough up high to get desired units.
Investors are also high portfolio diversification agenda as it provides dual benefit of risk mitigation and comparative growth assessment. Unfortunately the most advertised schemes and known fund houses such as ICICI Prudential & DSP occupy media and mind space, plethora of claims made by numerous fund managers make it difficult for the investor to find right fit for his/her investment.
There are a number of AMCs with good MF schemes which are less advertised but have proven track record matching some of the most advertised and known ELSS schemes. We assessed and analyzed all ELSS schemes which were in existence for over a decade to come out with a subset of schemes which have performed consistently over period of time and delivered above our benchmark of 10% returns.
There were Nine different AMCs which owned ELSS schemes that gave consistently 10% over different point of time. Top performing ELSS schemes gave over 15% even during 10-year period, there were a few lesser know schemes which also delivered over 10% returns during last decade. These were also reasonably low priced compared to their competitors
There were three ELSS schemes which were cheapest and the best amongst the high performing fund schemes, these three also delivered over 10% return and their NAV was priced less than Rs 50/-. Two of these schemes were growth schemes while other was dividend scheme. Irrespective of the type of the scheme they still delivered
Kotak Tax Saver and HSBC Tax Saver Equity are the two growth schemes with NAV less than Rs 50 and returns are over 10% which is higher than Provident fund and some of the Corporate Fixed Deposits. These are cheapest and best schemes that investors can look up to for their portfolio diversification and with greater reliability in terms of future performance. Canara Robeco Tax Saver was only Dividend scheme with consistent high returns and low NAV.
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