Saturday, December 8, 2012

Top ELSS Mutual Funds in India – December 2012


The year 2012 is almost over and the tax fever is going to pick up as soon as the year 2013 starts. All the salaried individuals in india will be scrambling to save their taxes and just like every year we will have a few articles in our blog about Tax Savings and Investments. There are more than 50 Equity Linked Saving Schemes (ELSS) in India that are available for Investors to invest in. Some are performing really well and some are not performing well. So, as investors we need to be smart and invest only in those top performing funds. The purpose of this article is to analyse the performance of the Mutual Funds in the ELSS category and pick out the top performing funds from different categories.

Before we begin: all the Statistics, returns % etc are as of Quarter Ending September 2012.

Top Performing Funds – Based on 6 Month Returns %

Fund NameAssets Under Management (In Crores)3 month Returns6 month Returns 1 year Returns2 year Returns3 year Returns
SBI Tax Advantage Sr 225.8517.8%31.2%N/AN/AN/A
Principal Tax Savings215.5215.9%24.8%34.7%2%5.6%
JM Tax Gain Fund36.8715.4%23.3%23.2%-2.1%9%
IDFC Tax Advantage144.2812.1%23.2%26.9%4.2%9.7%
HSBC Tax Saver Equity Fund200.8813.6%23%30.5%3.3%7.6%

Top Performing Funds – Based on 1 year Returns %

Fund NameAssets Under Management (In Crores)3 month Returns6 month Returns 1 year Returns2 year Returns3 year Returns
Reliance ELSF Series 1135.588.3%18.1%38.1%5.2%10,6%
Reliance Tax Saver1993.7713.5%18.7%35.2%5.7%11.6%
Principal Tax Savings215.5215.9%24.8%34.7%2%5.6%
DSP BR Tax Saver Fund728.8513.5%22%30.7%2%8%
HSBC Tax Saver Equity Fund200.8813.6%23%30.5%3.3%7.6%

Top Performing Funds – Based on 2 year returns %

Fund NameAssets Under Management (In Crores)3 month Returns6 month Returns 1 year Returns2 year Returns3 year Returns
ICICI Prudential RIGHT Fund110.6212.6%19.6%28.8%11.2%13.8%
Axis Long Term Equity Fund263.8712.2%21.9%25.1%8.4%N/A
BNP Paribas Tax Advantage Plan82.0310.8%18%25.2%7.1%9.3%
Reliance Tax Saver1993.7713.5%18.7%35.2%5.7%11.6%
Can Rebeco Equity Tax Saver456.1211.1%17.5%245.3%11.1%

Top Performing Funds – Based on 3 year returns %

Fund NameAssets Under Management (In Crores)3 month Returns6 month Returns 1 year Returns2 year Returns3 year Returns
ICICI Prudential RIGHT Fund110.6212.6%19.6%28.8%11.2%13.8%
Reliance Tax Saver1993.7713.5%18.7%35.2%5.7%11.6%
Can Rebeco Equity Tax Saver456.1211.1%17.5%24%5.3%11.1%
Reliance ELSF Series 1135.588.3%18.1%38.1%5.2%10.6%
Franklin India Tax Shield853.2610%16.9%21.3%5%10.6%

Best Performing Large Funds – Based on Assets Under Management

Fund NameAssets Under Management (In Crores)3 month Returns6 month Returns 1 year Returns2 year Returns3 year Returns
SBI Magnum Tax Gain4648.2810.2%18.%26.2%2.3%5.5%
HDFC Tax Saver3223.6710.9%14.9%17.5%-0.8%7.4%
Reliance Tax Saver1993.7713.5%18.7%35.2%5.7%11.6%
Sundaram Tax Saver1377.5111%19.6%24.2%0.9%4.2%
ICICI Pru Tax Plan1362.8511.3%19.2%25.9%3.4%9.8%

As you can see a number of new funds have come on top in the 6 month or 1 year category but that could just be a coincidence because the indian markets have performed exceptionally well over the past 1 year. The real performance of a fund can only be gauged by looking at the 2 or 3 year returns. The Indian markets have been very volatile over the past 3 years and the consistent performers are those that were able to keep their Assets Under Management intact (or even increase them) as well as provide double digit rate of returns in the 2 to 3 year timeframe.

SBI Magnum Tax Gain and HDFC Tax Saver have been in the top 5 ELSS Mutual Funds in India for close to a decade now. My first ever mutual fund investments to save tax in the year 2005 were in these 2 funds only and their performance since then too has been nothing short of amazing. The other 3 funds in the top 5 funds in terms of Assets Under Management too have been performing very well over the past 5+ years.

These large funds are those that have the confidence of investors across india and even today hundreds of thousands of ELSS investors choose these funds and their assets under management are consistently rising.

You may be wondering why I consider their performance amazing when other smaller funds have given better returns than them in short-term. Can you or me even imagine managing assets worth 3000 or 4000 crores and provide consistent returns to all investors? Managing a 100 crore asset worth fund is much easier than managing a fund that has 4000 crores worth of assets. See the difference?

Happy Tax Saving and Happy Investing!!!

Disclaimer: The above was just an analysis of the different ELSS funds in India and does not constitute Investment Advice. Equity Investments come with an inherent risk that could result in loss of capital as well. Past performance may or may not be sustained in future. So, Investors are requested to do their own research/analysis as well as consider their risk appetite before they actually purchase any funds.

2 comments:

  1. Hi.Could u plz tell me,if my annual income is Rs.504000, being a female, how much can I invest in elss funds to get tax benefit? Suppose I invest Rs.60000 in it how much amount will actually be deducted from my tax amount? And what else should I invest in? Thanks.

    ReplyDelete
    Replies
    1. Hi Anonymous,
      Apart from being a female, there are numerous other factors that determine how much taxes you pay every year. So, just by seeing the final number I would assume you would fall in the 10% tax bracket. So, if you invest Rs. 60,000/- your Income Tax will come down by Rs. 6,000/-

      To know more about the Tax Slabs in India as of the 2012 budget - Click Here

      Apart from this, there have been multiple articles about Investment and Tax Saving in this blog. You can check the Income Tax Home Page of this blog by Clicking Here or You can read the following:

      1. Best Tax Saving Options available for Investment
      2. Life Stage Based Tax Saving Portfolio
      3. Saving Tax Through Investments

      Anand

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