Best ELSS Tax Saving Mutual Funds to invest in 2022

Top 5 Best ELSS Tax Saving Mutual Funds 2022-2023 in IndiaThere are several investment schemes in India to save income tax u/s 80c. However, majority of the tax saving schemes have lock-in period of 5 years and above are excluding ELSS mutual funds. Tax saving ELSS mutual funds has lowest lock-in period of 3 years. Investors can invest in such low lock-in period scheme, have tax saving and such option can also grow your money at a higher rate compared to other schemes. What are ELSS Tax Saving Mutual funds? Which are the Best ELSS Tax Saving Mutual Funds to invest in 2022 in India which are consistent performers?

Also Read: 5 Multibagger Mutual Funds – 10x returns in last 10 years

What are ELSS Tax Saving Mutual Funds?

Tax Saving Mutual Funds also termed as ELSS (Equity Linked Saving Scheme) mutual funds are specific mutual funds that are aimed to provide income tax benefit u/s 80c up to Rs 1.5 Lacs in a financial year.

Here are the benefits of investing in ELSS Mutual Funds.

1) Lowest Lockin of 3 years – There are several tax saving investment schemes like PPF, NSC, Tax save fixed deposits etc., All these investment options have lock-in period of 5 years and above. However, ELSS tax saving mutual funds have a lowest lock in period of 3 years. Means you can withdraw your money any time after 3 years tenure or you can continue beyond 3 years too.

2) Income tax benefit upto 1.5 Lacs u/c 80c – One can invest in ELSS tax saving mutual funds and save income tax for the investments done up to Rs 1.5 Lacs u/s 80c in a financial year.

3) Growth in investment with high returns – All tax saving investment schemes provide fixed income which ranges between 6% to 7.1%. In case of ELSS mutual funds, if invested for over 5 years, one can expect 12% to 15% annualised returns though these returns are not fixed or guaranteed.

Who can invest in ELSS Mutual Funds?

Want to save tax u/s 80c up to Rs 1.5 Lacs in a financial year.

Looking for investment for 3 to 5 years or above.

Moderate to high risk investors.

Investors looking to invest small lump sums or through monthly SIP. One should note that each SIP would have lock-in period of 3 years. E.g. Apr-2022 SIP would have 3 year lock-in period i.e. Mar-2025. May-22 SIP lock-in period is till Apr-25 and so on.

Willing to take some risk and expect high returns of over 12% per annum.

Best ELSS Tax Saving Mutual Funds to invest in 2022

Since we are in the beginning of the financial year, it is a good way to start investing these mutual funds through SIP every month.

There are 32 ELSS mutual funds and the majority of them are able to deliver good returns in the last 3 years due to recent bull run, hence picking up Top 5 ELSS funds is little Tuff. We filtered these is funds based on 3 years and 5 years rolling returns to check consistency in returns beyond annualized returns.

Here is the list of Top ELSS Mutual Funds in India, which are consistent performers.

#1 – Quant Tax Plan

#2 – Mirae Asset Tax Saver Fund

#3 – BOI AXA Tax Advantage Fund

#4 – Canara Robeco Equity Tax Saver Fund

#5 – IDFC Tax Advantage (ELSS) Fund

Top 5 Best ELSS Funds for 2022 – Fund Performance and Metrics

#1 – Quant Tax Plan

Investment objective of the fund

The MF scheme aims to generate capital appreciation by investing predominantly in equity shares with growth potential. The secondary objective is to give dividend and other income.

Funds Performance and Risk Statistics

Performance & Risk Metrics Quant Tax Plan
Value Research Rating 5 Star
3 Years – SIP Returns 54%
5 Years – SIP Returns 35%
5 Years – Annualised Returns 25%
AUM –  Crores 855
Expense Ratio 0.57%
Risk Grade Average
Return Grade High
Beta 0.97
Alpha 16.70

This fund has a low beta of 0.97. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a high alpha of 16.7. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 96% in equity and balance holds in cash. Its majority of the portfolio is invested in stocks in the services industry, financial sector, construction, consumer services and metals and mining.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 51% of the times
  • 8% to 12% returns – 25% of the times
  • < 8% returns –18% of the times
  • Negative returns – 5.5% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 100% of the times
  • 8% to 12% returns – Zero times
  • < 8% returns – Zero times
  • Negative returns – Zero times

This fund generated 22% annualized return since inception in 2013 (direct fund). Considering its outstanding performance in the category and low expense ratio, it is one of the Best ELSS Mutual Funds to invest in 2022.

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#2 – Mirae Asset Tax Saver Fund

Investment objective of the fund

The scheme seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related instruments.

Funds Performance and Risk Statistics

Performance & Risk Metrics Mirae Asset Tax Saver Fund
Value Research Rating 5 Star
3 Years – SIP Returns 31%
5 Years – SIP Returns 23%
5 Years – Annualised Returns 20%
AUM –  Crores 10,802
Expense Ratio 0.55%
Risk Grade Low
Return Grade High
Beta 1.00
Alpha 4.19

This fund has a high alpha of 4.19. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.This fund has a low beta of 1. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

Currently it invests 99% in equity and balance holds in cash. Its majority of the portfolio is invested in stocks of financial services, technology, energy, healthcare and automotive.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 74.5% of the times
  • 8% to 12% returns – 11% of the times
  • < 8% returns – 14% of the times
  • Negative returns – 0.5% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 100% of the times
  • 8% to 12% returns – Zero times
  • < 8% returns – Zero times
  • Negative returns – Zero times

This fund generated 22% annualized return since inception in 2013 (direct fund). Considering its outstanding performance in the category and low expense ratio, it is one of the Best ELSS Funds to invest in 2022.

#3 – BOI AXA Tax Advantage Fund

Investment objective of the fund

The scheme seeks to build a diversified portfolio of stocks of companies having sustainable business models, without any bias of market capitalisation and sector. The scheme will follow the top-down approach of equity selection.

Funds Performance and Risk Statistics

Performance & Risk Metrics BOI AXA Tax Advantage Fund
Value Research Rating 5 Star
3 Years – SIP Returns 32%
5 Years – SIP Returns 23%
5 Years – Annualised Returns 20%
AUM –  Crores 539
Expense Ratio 1.35%
Risk Grade Average
Return Grade High
Beta 0.87
Alpha 9.16

This fund has a low beta of 0.87. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a high alpha of 9.16. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 95% in equity and balance holds in cash. Its majority of the portfolio is invested in stocks in financial services, technology, healthcare, materials and capital goods and services.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 47.8% of the times
  • 8% to 12% returns – 20% of the times
  • < 8% returns – 33% of the times
  • Negative returns – 0.2% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 100% of the times
  • 8% to 12% returns – Zero times
  • < 8% returns – Zero times
  • Negative returns – Zero times

This fund generated 18% annualized return since inception in 2013 (direct fund). Considering its outstanding performance compared to its peers, it can be considered as one of the Top ELSS Mutual Funds in India.

#4 – Canara Robeco Equity Tax Saver Fund

Investment objective of the fund

The scheme seeks to achieve long term capital appreciation by predominantly investing in equities. It also offers tax benefits under Section 80C. The investments may be made in primary as well as secondary markets and scheme may also invest in overseas equity markets like ADRs/GDRs.

Funds Performance and Risk Statistics

Performance & Risk Metrics Canara Robeco Equity Tax Saver Fund
Value Research Rating 4 Star
3 Years – SIP Returns 29%
5 Years – SIP Returns 22%
5 Years – Annualised Returns 19%
AUM –  Crores 3,218
Expense Ratio 0.73%
Risk Grade Low
Return Grade Above Average
Beta 0.87
Alpha 5.15

This fund has a low beta of 0.87. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a high alpha of 5.15. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 95.8% in equity and balance holds in cash. Its majority of the portfolio is invested in stocks in financial services, technology, automobile and healthcare sector.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 68% of the times
  • 8% to 12% returns – 18.8% of the times
  • < 8% returns – 13% of the times
  • Negative returns – 0.2% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 100% of the times
  • 8% to 12% returns – Zero times
  • < 8% returns – Zero times
  • Negative returns – Zero times

This fund generated 16.4% annualized return since inception in 2013 (direct fund). Considering its outstanding performance in the category and low expense ratio, it is one of the Best ELSS Funds for 2022.

#5 – IDFC Tax Advantage (ELSS) Fund

Investment objective of the fund

The scheme seeks to build a diversified portfolio comprising of stocks of companies with strong fundamentals that are available at reasonable valuations. The scheme can be fully into equities (and equity related securities) and up to 20% in debt & money market instruments.

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Funds Performance and Risk Statistics

Performance & Risk Metrics IDFC Tax Advantage (ELSS) Fund
Value Research Rating 4 Star
3 Years – SIP Returns 37%
5 Years – SIP Returns 23%
5 Years – Annualised Returns 18%
AUM –  Crores 3,428
Expense Ratio 0.68%
Risk Grade High
Return Grade Above Average
Beta 1.15
Alpha 2.38

This fund has a beta of 1.15. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a high alpha of 2.38. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 95% in equity and balance holds in cash. Its majority of the portfolio is invested in stocks in the services industry, financial sector, construction, consumer services and metals and mining.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 46% of the times
  • 8% to 12% returns – 20% of the times
  • < 8% returns – 21% of the times
  • Negative returns – 13% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 100% of the times
  • 8% to 12% returns – Zero times
  • < 8% returns – Zero times
  • Negative returns – Zero times

This fund generated 19% annualized return since inception in 2013 (direct fund). Considering its outstanding performance in the category and low expense ratio, it can be considered as one of the Best ELSS Mutual Funds in 2022 in India.

List of ELSS Mutual Funds with annualised returns (Returns over 1 year are annualised)

Mutual Fund Name 1 Year 3 Years 5 Years
Quant Tax Plan 47% 39% 25%
Mirae Asset Tax Saver Fund 25% 23% 20%
BOI AXA Tax Advantage Fund 27% 26% 20%
Canara Robeco Equity Tax Saver Fund 24% 22% 19%
IDFC Tax Advantage (ELSS) Fund 33% 22% 18%

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6 comments

  • Kumar

    Need best mutual funds as well. Not ELSS ones but normal ones pls

  • Sreejith

    With 52% returns in 2 years, DSP Tax Saver Fund should have made the list. Surprisingly it was on your list a year or two ago based on which I made the investment.
    Good content as always.

    • Sreejith, While we filtered the list, we looked at consistent in returns i.e. rolling returns. While in 5 year rolling returns, it was in par with the listed ELSS funds, for 3 year rolling returns, DSP tax saver funds generated negative returns for 3% of the times and 0% to 8% returns for 30% of the times. Hence this is not figured in our list. No doubt it is good fund, but other peer funds are ahead of this fund.

  • Kamal Garg

    Surprisingly in your many such lists of top 5 best mutual funds in various categories, I have noticed that often your list does not contain the biggies like HDFC, ICICI, ABSL, etc kind of MF schemes in their respective categories.
    There is nothing wrong in your selection criteria, they are perfectly OK.
    Are these big MF houses losing their charm as the best performer or a very large AUM often would have its own problem or these new comers like Quant and Mirae are using better analytical tools and better technological aids in giving getter performance.

    • Kamalji, See my remarks when starting the top 5 list. There are almost all ELSS funds delivered good returns in medium term. Our list is picking up consistent performers among them. If we got with all funds, the number would be beyond 10, however since we focused only for 5, you might not be seeing the other ones.

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