Investing in tax-saving mutual funds, commonly known as stock-linked savings schemes (ELSS), allows investors to avoid taxes while potentially generating substantial profits in the stock market. ELSS funds are an appealing investment choice because they provide both tax savings under Section 80C of the Income Tax Act and the possibility of long-term financial growth. Several ELSS funds have outpaced the market in the last year, providing investors with significant gains. Let’s look closer at the top-performing tax-saving mutual funds over the previous year, as of July 2023.
Motilal Oswal Long-Term Equity Fund
The Motilal Oswal Long-Term Equity Fund has regularly outperformed its peers. This fund’s direct plan has generated extraordinary returns of 34.09% over the last year, while the regular schedule has offered returns of 32.45%. This programme is based on the NIFTY 500 Total Return Index, which produced a noteworthy return of 24.44% in one year. The fund’s strategy focuses on long-term investments in high-quality, growing firms.
SBI Long-Term Equity Fund
Another top-performing ELSS fund is the SBI Long-Term Equity Fund. In the past year, the direct plan generated impressive returns of 33.07%, while the regular program generated returns of 32.22%. The fund mimics the S&P BSE 500 Total Return Index, which returned 24.50% during the same period. The fund’s investment strategy identifies companies with high growth potential and makes long-term investments.
JM Tax Gain Fund
JM Tax Gain Fund outperformed the market last year, with its direct plan returning 30.97% and the regular plan returning 39.71%. The fund mimics the S&P BSE 500 Total Return Index, which returned 24.50% annually. The JM Tax Gain Fund invests in large-cap, mid-cap, and small-cap equities to capitalise on growth opportunities across market categories.
ITI Long-Term Equity Fund
ITI Long Term Equity Fund has achieved outstanding returns in the last year, with the direct plan returning 30.14% and the regular program returning 27.66%. The fund mimics the NIFTY 500 Total Return Index, which returned 24.44% in a year. The ITI Long-Term Equity Fund seeks to produce long-term wealth by investing in fundamentally sound firms with good growth potential.
HSBC ELSS Fund
The HSBC ELSS Fund has shown steady success in the last year, with the direct plan returning 29.55% and the regular program returning 28.51%. The fund mimics the NIFTY 500 Total Return Index, which returned 24.44% in a year. The HSBC ELSS Fund employs a research-driven investing approach to discover firms with solid fundamentals, durable competitive advantages, and long-term development potential.
Kotak Tax Saver Fund
Kotak Tax Saver Fund has shown impressive returns in the past year, with the direct plan returning 29% and the regular program returning 27.32%. The fund mimics the NIFTY 500 Total Return Index, which returned 24.44% in a year. The Kotak Tax Saver Fund invests from the ground up, concentrating on high-quality firms with solid financials, competitive advantages, and development prospects.
Bandhan Tax Advantage (ELSS) Fund
Bandhan Tax Advantage (ELSS) Fund has performed well in the last year, with the direct plan returning 29.24% and the regular program returning 27.74%. The fund mimics the S&P BSE 500 Total Return Index, which returned 24.50% annually. The Bandhan Tax Advantage (ELSS) Fund identifies investment possibilities across market capitalisations by combining top-down and bottom-up methodologies.
HDFC Taxsaver Fund
HDFC Taxsaver Fund has shown outstanding returns in the last year, with the direct plan returning 28.78% and the regular program returning 27.99%. The fund mimics the NIFTY 500 Total Return Index, which returned 24.44% in a year. The HDFC Taxsaver Fund invests in a mix of growth and value stocks, concentrating on firms with good fundamentals and growth prospects.
Bank of India Tax Advantage Fund
The Bank of India Tax Advantage Fund outperformed the market by 28.34% on the direct plan and 26.82% on the conventional program during the prior year. The fund’s performance is based on the S&P BSE 500 Total Return Index, which generated annual returns of 24.50%. The Bank of India Tax Advantage Fund adheres to a stringent investment strategy, investing across sectors and market capitalisations in equities.
Quant Tax Plan
The Quant Tax Plan has provided competitive returns in the last year, with the direct plan returning 27.15% and the standard plan returning 25.34%. The fund mimics the NIFTY 500 Total Return Index, which returned 24.44% in a year. Quant Tax Plan is a quantitative model-driven strategy to capitalise on market inefficiencies and generate alpha via systematic investing techniques.
Mahindra Manulife ELSS Fund
Mahindra Manulife ELSS Fund has shown steady success in the last year, with the direct plan returning 27.67% and the regular program returning 25.52%. The fund mimics the NIFTY 500 Total Return Index, which returned 24.44% in a year. The Mahindra Manulife ELSS Fund has a research-intensive investing strategy, concentrating on firms with long-term business plans and promising growth prospects.
Conclusion
Several tax-saving mutual funds have performed exceptionally well in the past year, offering investors tax savings and good profits. However, keep in mind that previous success is not a guarantee of future outcomes. Before making investment selections, investors should perform extensive research, assess their financial goals and risk tolerance, and talk with a financial counsellor. Furthermore, tax-saving mutual funds have a three-year lock-in period, which should be considered when planning investments. Investors may make educated judgements to fulfil their long-term financial goals by carefully analysing fund performance, investing strategy, and track record.
