Top 5 ELSS Funds for tax savings

Bet on these for Better Returns

No. 5 Principal Tax Savings

NAV : Rs. 80.6

Launch Date : March 1996

5Year Returns : 55.96 %

3 Year Returns : 44.79%

1 Year Returns : 22.58%

Principal Tax savings fund has been able to get a rank in Top 5 ELSS funds of Investment Guru. Actually there was a neck to neck competition with Sundaram BNP Paribas Tax saver fund for this slot. However better consistency paid dividends and it finally managed to sneak in the Top 5 funds. The fund has high exposure to Energy, Financial Services, Services and Technology sectors. Reliance Industries, Phoenix International, Centurion Bank of Punjab, Grasim and Jindal Steel and Power fare among the top holdings.


No. 4 Prudential ICICI Tax Plan
NAV : Rs. 94.66

Launch Date : August,1999

5Year Returns : 51.08 %

3 Year Returns : 47.92%

1 Year Returns : 21.87%

This fund had a better three year return than the No.3 fund. However it lagged on the 5 year returns parameter with a big gap. This fund has high exposure to Health care, Chemicals, Diversified, FMCG and Auto Sector. Cedilla Healthcare, Sundaram Clayton, kesoram, Trent and Andhra bank are among the top holdings.

No. 3 HDFC LT Advantage Fund
NAV : Rs. 95.78

Launch Date : December,2000

5Year Returns : 55.96%

3 Year Returns : 44.79%

1 Year Returns : 22.58%

HDFC long term fund is a star performer from thye HDFC Stable. This fund has proved to be low risk and high Return fund. In terms of 5 Years performance it has actually done better than the No. 2 ranked fund. However, it has lagged in comparison to the No.2 fund in terms of 3 years return by a big margin. The fund has high exposure to FMCG, technology, metals, Chemicals and services sector. Top holdings include Concor, Maharashtra Seamless, Reliance Industries, SBI and Blue Star.


No. 2 HDFC Tax Saver
NAV : Rs. 149.33 (Growth option)

Launch Date : March,1996

5Year Returns : 52.86%

3 Year Returns : 54.19%

1 Year Returns : 28.13%

A star performer from HDFC, this fund has earned a distinct respect for itself in its category. The fund has an excellent track record and on the management front it should be ranked No.1 The fund has limited itself to a limited number of shares to improve its watch over its holdings. HDFC Tax saver funds has high exposure to Auto, Engineering, Technology, Construction and FMCG sector. Tata Motors, Crompton Greaves, Thermax, Infosys and Satyam are top holdings.


No. 1 SBI Magnum Taxgain
NAV : Rs. 58.19

Launch Date : March,1993

5Year Returns : 60.41%

3 Year Returns : 67.21%

1 Year Returns : 43.84%

The true leader in wealth creation, Magnum taxgain has been able to outperform all other ELSS funds on a consistent basis. The fund has bagged No. 1 rank in 1 Year, 3 Year and 5 Years returns. One of the main reasons for funds outperforming its peers is that it has able to take advantage of the ongoing boom by investing the hot sector at right time. Given the dynamic fund management, it is expected to continue its lead in the Tax saving mutual funds. However, the fund would get a tough competiton from HDFC Tax saver fund. Magnum Taxgain is heavily invested in Technolgy, Construction, Engineering, Diversified and Metal sectors. Jai Prakash, Shree Cement, Reliance Communication, Crompton Greaves and Infosys are the major holdings.

After going through the above analysis, Investment Guru is of the view that a prudent Investor should put his money in Magnum Taxgain and HDFC Tax saver Fund. For those who do not want liquidity at regular intervals, Growth option would be good. For those, who want regular tax free returns in their hands, choose the Dividend Payout Option.