ELSS wins in choppy markets

ELSS generated an average compounded annual growth of 23,beating PPF that could yield only 8.6 per cent.

Published: March 30, 2012 2:00 pm

Mutual funds Equity Linked Savings Schemes (ELSS) have generated an average compounded annual growth rate (CAGR) of 23 per cent over the last three years and have been in vehicle that saved tax and gave good returns in choppy markets,beating PPF that could yield only 8.6 per cent.

Mutual Funds Check for top funds

The government proposed to keep the tax deduction limit under Section 80C at Rs 1 lakh but investors should look to utilise it to invest in an option that delivers highest return in the long term.

While the best performing ELSS-ICICI Prudential Tax Plan has generated a 33 per cent per annum return over the last three years,Canara Robeco Equity Taxsaver and HDFC Taxsaver have generated 32 and 31 per cent respectively. Even the worst performing Escorts Tax Plan has grown by 12.6 per cent per annum. So,if you had invested Rs 50,000 in April 2009 towards tax saving in an average performing fund,your investment would be worth Rs 93,000 today.

All investment instruments that qualify for tax benefits under Section 80C have a minimum lock-in of three years and investors who can lock-in can look forward to getting good returns in the long run.

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