5 Best ELSS Tax Saving Mutual Funds to invest in 2019

With the start of the New Year 2019, it is the time to plan your tax saving investments. There are so many tax savings options but ELSS stand out the best because they don’t just help you to save tax but also give you an opportunity to grow your money. ELSS is a category of mutual funds that played a significant role in increasing the popularity of mutual funds in India. Let’s check 5 Best ELSS Tax Saving Mutual Funds to invest in 2019.

Some of the ELSS tax saving mutual funds have given good returns in the last five years. In this post, I will discuss, what ELSS funds are, why you should invest in ELSS funds, and which are 5 Best ELSS Tax Saving Mutual Funds to invest in 2019. These ELSS tax mutual funds are shortlisted based on several key parameters.

What are ELSS Tax Saving Mutual Funds?

ELSS funds are open-ended diversified equity mutual funds that invest primarily in equity and equity-related products. The investment made in ELSS tax saving mutual funds is eligible for tax exemption u/s 80C up to Rs. 1.5 lakh. ELSS (Equity Linked Savings Scheme) don’t just help you to save tax but also give you an opportunity to take advantage of the equity market. Since ELSS funds are equity-based funds, the returns from these ELSS funds reflect the returns from equity markets. These ELSS tax saving mutual funds have a lock-in period of 3 years.

Why should you invest in ELSS Tax Saving Mutual Funds?

There are various reasons that make ELSS Tax Saving Mutual Funds a great investment option. ELSS is one of the best investment options to save tax u/s 80C on investments up to Rs. 1.5 lakh. These tax saving funds also give you an opportunity to compound your money from the potential of the equity market. Moreover, compared to traditional tax saving instruments like NSC, PPF, and Tax Saver FD schemes, the lock-in period of an ELSS fund is much lower. ELSS funds have a lock-in period of three 3 years. You can also choose for dividend option and get some gains even during the lock-in period of 3 years.

Disadvantages of ELSS Tax Saving Mutual Funds

1. ELSS funds are risky as they invest primarily in equity and equity-related products. Note that all the risks associated with equity investments applicable to ELSS Tax Saving Mutual Funds.

2. The amount invested in ELSS Tax Saving Mutual Funds is locked for three years. Therefore, you cannot withdraw your money before the completion of three years.

How these ELSS Tax Saving Mutual Funds are shortlisted?

These ELSS tax saving mutual funds are shortlisted based on the following key parameters.

1. Fund Performance: These ELSS funds are shortlisted on the basis of 3 years, 5 years and 10 years performance.

2. Assets Under Management (AUM): Shortlisted funds have Assets Under Management (AUM) of more than Rs. 500 Crores. Higher AUM shows investors’ confidence in the fund.

3. Crisil Rating: Crisil rated these ELSS funds as Rank-1, Rank-2, and Rank-3. Rank1 is the highest rank.

4. Value Research Rating: Value Research rated these ELSS funds as 5 stars, 4 stars, and 3 stars. Higher is better.

5 Best ELSS Tax Saving Mutual Funds to invest in 2019

On the basis of the above parameters, the 5 Best ELSS Tax Saving Mutual Funds to invest in 2019 are given below

Scheme Name	Returns in Percentage*				AUM (Rs Crores)	Crisil Rank (Sep 30, 2017)	Value Research Rating (Out of 5)
	1 Year	3 Years	5 Years	10 Years
Axis Long term Equity Fund	1.7	11.69	19.78	NA	17626	2	5
Aditya Birla Sun Life Tax Relief 96	-5.44	12.14	18.92	18.49	6984	1	5
Invesco India Tax Plan	-2.24	11.6	17.6	19.09	687	1	4
ICICI prudential Long term Equity Fund (Tax Saving)	-0.18	9.66	15.71	19.64	5486	2	3
DSP Tax Saver Fund	-8.63	11.78	17.24	18.19	45.64	3	4
*As on 4/1/2019 Data Source: Value Research Online

1. Axis Long Term Equity Fund

This is one of the Best ELSS Tax Saving Mutual Funds with Rs. 17,626 Crores worth of assets under management. The objective of this ELSS fund is to generate long-term capital growth. The fund invests in a diversified portfolio predominantly consisting of equity and equity-related products. The fund is suitable for an investment horizon of 3-5 years or more. This ELSS tax saving mutual fund has been consistently performing well since its inception. The fund has given a return of 11.69% and 19.78% in the last three and five years respectively. Crisil rated this ELSS fund as Rank-2 (Lower is better) and Value Research Online rated as 5 Stars (5 out of 5).

2. Aditya Birla Sun Life Tax Relief 96

This is one of the oldest and Best ELSS Tax Saving Mutual Funds in India to invest. The objective of this fund is to save tax while growing your money through equity investments. This tax saving fund is suitable for investors who are seeking long-term capital growth. This fund has also been consistently performing well since its inception. This ELSS fund has given a return of 18.49% to investors in the last ten years. Last three and five years returns of this fund are 12.14% and 18.92% respectively. Value Research rated this fund as 5 Stars (5 out of 5). Crisil rated this fund as Rank-1 (Lower is better).

3. Invesco India Tax Plan

The objective of this ELSS fund is to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities. This ELSS fund is suitable for investors who are seeking capital appreciation over the long term. This ELSS fund has been consistently performing well since last 10 years. This fund has given a return of 19.09% in the last 10 years. This ELSS fund has given a return of 11.06% and 17.60% in the last 3 & 5 years respectively. Crisil rated this fund as Rank-1 (Lower is better) and Value Research Online rated this fund as 5 Stars (5 out of 5).

4. ICICI Prudential Long T erm Equity Fund 

The objective of the fund is to generate long-term capital appreciation through investments made primarily in equity funds and equity-related securities. This ELSS fund is suitable for investors who are seeking long-term wealth creation solution. This ELSS fund has also been consistently performing well and generated a return of 19.64% in the last 10 years. Last three and five yers return of this fund are 9.66% and 15.71% respectively. Value Research rated this fund as 3 stars (3 out of 5). Crisil rated this fund as Rank-2 (Lower is better).

5. DSP Tax Saver Fund

The objective of this ELSS is to generate medium to long-term capital growth from a diversified portfolio constituted of equity and equity related securities. This ELSS fund is also performing well and has given a return of 18.19% in the last ten years. The fund has generated a return of 11.78% and 17.24% in the last 3 & 5 years respectively. Crisil rated this ELSS fund as Rank-3 (Lower is better) and Value Research Online rated this ELSS fund as 4 Stars (5 out of 5). 

Disclaimer: This post is strictly for informational purposes only. ELSS funds do not guarantee any returns. Past performance of an ELSS tax saving mutual fund may or may not sustain in the future. There are risk associated with investing in ELSS Tax Saving Mutual Funds. Please consult a mutual fund advisor or a financial planner before taking any investment decision. 

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Also read: All about ELSS | Tax Saving Mutual Funds

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