If you invest in mutual funds over the long term, your returns tend to multiply, which is known as “compound interest.” Gains earned in the first few years are added to the corpus, causing it to grow significantly over time.
Here, we share the list of ELSS funds that have returned more than 20% in the past five years. When a mutual fund plans to achieve an annualized return of 20% over five years, $One hundred thousand people appreciated $Five years later it reached 248,000.
But before we continue, let us first understand what exactly is ELSS Fund?
What is the ELSS Fund?
As per the Equity Linked Savings Plan 2005, an Equity Linked Savings Plan is to invest at least 80% in equities. These schemes are eligible for tax deduction under Section 80C of the IT Act up to a limit of $1,50,000.
There are 42 schemes under the ELSS category with a total management scale of $AMFI data as of September 30, 2024 was Rs 257 crore.
As shown in the table below, the best-performing ELSS schemes have annualized returns between 20-32%. This means that if someone invests $Lakhs in the plan five years ago, it would swell to $248,000 in five years. Calculated at an annualized rate of 32%, investment $100,000 increased to $400,000 in five years.
Quant ELSS Tax Saver Fund’s annualized return over five years was 32.02%, Motilal Oswal ELSS Tax Saver Fund’s CAGR was 24.14%, and Bank of India ELSS Tax Saver Fund’s annualized return was 25.87%.
It’s important to note that historical returns, while indicative, are not a guarantee of future returns. In other words, just because a program has performed very well recently, doesn’t mean it will continue to perform at the same rate in the future.
Note: This story is for informational purposes only. Please consult a SEBI registered investment advisor before taking any investment related decision.
