Best ELSS Funds 2019-Top 3 Tax Saving Mutual Funds




Best ELSS Funds 2019-Top 3 Tax Saving Mutual Funds 

 

Best ELSS Funds 2019




Most of the salaried class employees just completed their tax saving planning for the F.Y 2018-19 in the month of March’19 only.Though planning for tax saving is not the eleventh-hour task, but most of the employees tend to do this tax saving planning hurriedly and usually end up investing in unplanned tax saving instruments. Considering this ideology, today I have decided to write a blog post on Best ELSS Funds 2019-Top 3 Tax Saving Mutual Funds.
Certainly, tax planning should be executed throughout the year and not to be perceived as a one ball game so that everyone can have the best plan in his kitty according to his needs.

Is ELSS good for long term investment?

There are a plethora of investment options for getting tax benefits under section 80 C, but investment in equity linked saving schemes(ELSS) or tax saving equity mutual funds is considered as one of the best tax savings options. Financial experts cum planners do always suggest that investment in ELSS mutual funds is undoubtedly the best tax saving long term investment for wealth creation. This is reasonable true since ELSS is one of the most liquid instruments as far as the other tax saving instruments are concerned.

Also, the investment in ELSS is statutory remains locked for a period of 3 years that helps investors in imperative long term wealth creation. One can withdraw his investment after 3 years for each investment in SIP modes or lump sum investment. But ideally, it is recommended to remain invested for 7 to 10 years for getting a healthy return on investments irrespective of market volatility.

What is the maximum investment limit u/s 80 C?

While we are talking about Best ELSS Funds 2019 for tax saving purpose, we must know that maximum permissible investment limit u/s 80 C for getting tax benefits is Rs 1.5 lakhs in a financial year. Although, one can choose ELSS mutual funds to invest for any amount but the deduction for section 80 C is subjected to a maximum of Rs 1.5 lakhs only.

Best ELSS Funds 2019 – Top 3 Tax saving Mutual Funds for 2019

At the very onset, I would like to reiterate that I do not advocate investment in Mutual Funds based on past performance. I already have written a blog post on Does mutual funds past performance influence your investment decision. Past performance should not be construed as the sole consideration for investment. It does not guarantee future fund performance as well. This is just an indication and depiction of actual facts.

I have selected the following top 3 best ELSS Funds 2019 based on their spectacular performance for the last couple of years. They are just simply top performing because they have managed somehow to maintain their balance both in the Bull and Bear market scenario. I will show the performance of the funds one by one along with other details.

Top 3 Best ELSS Funds 2019 – The following factors I considered while selecting the Top 3 Tax saving Mutual Funds for 2019.

  • Funds that have delivered superlative returns for the last 5 years and more than that;
  • Funds that have delivered a stable return (CAGR) of more than 15% for the last 5 years;
  • Funds that have bounced back very quickly during the market downturn and kept growing;
  • Funds that have AUM of more than Rs.500 Cr.
  • Funds that have holdings in financial sectors for more than 20% of its average AUM;
  • Funds that have an expense ratio of less than 1% or just little over to 1%;

1. Axis Long Term Equity Fund-Direct- Growth(ELSS)

Best ELSS Funds 2019

Basic Information

This is an open ended ELSS fund. Scheme size is Rs.16,467.23 Cr and NAV is Rs.45.514 as on 3rd December 2018. The expense ratio of the direct fund is as low as 0.95%. Fund inception date is 21.12.2009. Currently, this fund’s cash holding is 1.10%. Benchmark of the fund is S&P BSE 200.

What is the investment objective of the scheme?

This fund invests in a diversified portfolio of strong growth companies with sustainable business models. This fund maintains some investment principles like strong corporate governance, stable growth of the sector which is likely to be 1.5 to 2 times of the GDP, strong business models and finally strong ROEs and healthy cash flows.
Also, the fund looks for opportunities across market capitalisation striking the balance between large, mid and small cap allocation within the portfolio. This fund claims to look for a three to five years view in any of the companies across the large, mid and small cap sectors.

Fund Manager

This fund is currently being managed by Jignesh Gopani.

Fund performance for the last 5 years
Now, let’s see this fund’s performance for the last 5 years. Had you invested Rs.1.00 Lakh as lump sum 5 years ago, your investment would have grown to Rs.2,69,949 resulting in an absolute return of 169.95%. This is quite impressive. This ELSS fund has delivered a CAGR of 21.73%.

Best ELSS Funds 2019
Axis LTE last 5 years lump sum investment performance

Now let’s analyse this fund’s actual performance in a tabular form if a person started a SIP 5 years back @Rs 2000 p.m.

Investment Period Jan 3, 2014 to Dec 3, 2018
No. of Investments 60
Total Amount Invested ₹120,000.00
Total Units Purchased 3,766.65
Investment Value as on 03.12.18 ₹171,435.13
Latest NAV ₹45.514(as on 03.12.18)

Therefore, from the above table you can see that just in 5 years of time, your SIP would have grown to Rs.171435/- resulting in an XIRR of 14.69% which is really very much eye-catching.
From the below interactive table you can easily find the NAV on different dates during the last 5 years and the number of units acquired by investing Rs. 2000 monthly. Total units acquired 3766.65 and market value of the investment as on 03.12.2018 comes to Rs. 171435/- which is 1.43 times of your investments. So, this ELSS is in the 1st position of my Best ELSS Funds 2019.

Fund Portfolio details
Now let’s have a close look at the top 10 stocks where this fund has invested

Top 10 holdings of Axis LTE Growth
Name of Company Value (₹ Cr) Holding(%)
HDFC Bank 1,390.29 8.82
TCS 1,452.93 8.44
Kotak Mahindra 1,085.16 6.59
Bajaj Finance 797.4 6.09
Pidilite Ind 1,003.65 5.64
HDFC 929.29 4.84
Maruti Suzuki 730.1 4.82
GRUH Finance 794.18 4.43
Avenue Supermarket 639.68 3.91
Sun Pharma 644.48 3.88

Let’s take a look at this fund’s industry wise allocation

Sector % Allocation
Banking/Finance 37.07
Automotive 13.75
Technology 8.44
Pharmaceuticals 5.65
Chemicals 5.64
Consumer Durable 4.66

2. Aditya Birla Sunlife Tax Relief 96 – Direct-Growth

Best ELSS Funds 2019

Basic Information

This is an open ended ELSS fund. Scheme size is Rs.6,480.26 Cr and NAV is Rs.32.27 as on 3rd December 2018. The expense ratio of the direct fund is as low as 1.07%. Fund inception date is 29.03.1996. Earlier it was a close ended fund. Later, in July 1999 this fund was converted to an open ended fund. Currently, this fund’s cash holding is -0.29%. Benchmark of the fund is S&P BSE 200.

What is the investment objective of this scheme?

This fund seeks long term capital growth and primarily invests approximately 80% of its assets in equity and the balance 20% in debt and money market instruments. This fund is one of the oldest ELSS fund having a track record of over 20 years and delivering a superlative return for the investors. The fund house itself calls this fund an industry veteran which has a great track record of breaking the benchmark return numerous times in the past.

Fund Manager

Currently, this fund is being managed by Mr. Ajay Garg.

Fund performance for last 5 years

Now, let’s see this fund’s performance for Last 5 years. Had you invested Rs.1.00 Lakh as lump sum 5 years ago, your investment would have grown to Rs.2,58,889 resulting to an absolute return of 158.89%. This is quite impressive. This ELSS fund has delivered a CAGR of 20.93%.

Best ELSS Funds 2019
ABSL Tax Relief 96 last 5 years performance

Now let’s analyse this fund’s actual performance in a tabular form if a person started a SIP 5 years back @Rs 2000 p.m.

Investment Period Jan 3, 2014 to Dec 3, 2018
No. of Investments 60
Total Amount Invested ₹120,000.00
Total Units Purchased 5297.90
Investment Value as on 03.12.18 ₹1,70,963.00
Latest NAV ₹32.27(as on 03.12.18)

Therefore, from the above table you can see that just in 5 years of time, your SIP would have grown to ₹1,70,963 resulting in an XIRR of 14.58% which is really very much eye-catching.

From the above interactive table, you can easily find the NAV on different dates during the last 5 years and the number of units acquired by investing Rs. 2000 monthly. Total units acquired 5297.90 and market value of the investment as on 03.12.2018 comes to ₹1,70,963/- which is 1.424 times of your investments. So, this ELSS is in the 2nd position of my Best ELSS Funds 2019.

Fund Portfolio

Now let’s have a close look at the top 10 stocks where this fund has invested

Top 10 holdings of ABSL Tax Relief 96
Name of Company Value( Cr.) Holding(%)
Honeywell Automobile 475.11 7.39
Gillette India 472.58 7.33
Reliance 478.78 7.29
Bayer CropScien 383.4 5.92
Pfizer 378.56 5.84
GlaxoSmithKline 335.81 5.18
Sundaram-Clayto 312.51 4.82
Thomas Cook 293.5 4.53
HDFC 285.45 4.4
Shoppers Stop 216.73 3.34

Let’s take a look at this fund’s industry wise allocation

Sector % Allocation
Banking/Finance 16
Pharmaceuticals 14.36
Automotive 10.69
Cons NonDurable 10.68
Telecom 7.39
Oil & Gas 7.29

Basic Information

This is an open ended ELSS fund. Scheme size is Rs.620.10 Cr and NAV is Rs.53.44 as on 3rd December 2018. The expense ratio of the direct fund is as low as 0.99%. Fund inception date is 29.12.2006. Currently, this fund’s cash holding is -1.38%. Benchmark of the fund is S&P BSE 200.

What is the investment objective of the scheme?

This fund seeks long term capital growth and primarily invests in diversified portfolio of equity and equity related instruments. This fund is one of the oldest ELSS fund having a track record of over 10 years and delivering a superlative return for the investors.

Fund Manager

Currently, this fund is being managed by two fund managers altogether i.e. Mr. Amit Ganatra and Mr. Dhimant Kothari.

Fund performance for last 5 years

Now, let’s see this fund’s performance for the last 5 years. Had you invested Rs.1.00 Lakh as lump sum 5 years ago, your investment would have grown to Rs.2,59,313 resultingino an absolute return of 159.31%. This is quite impressive. This ELSS fund has delivered a CAGR of 20.97%.

Best ELSS Funds 2019

Now let’s analyse this fund’s actual performance in a tabular form if a person started a SIP 5 years back @Rs 2000 p.m.

Investment Period Jan 3, 2014 to Dec 3, 2018
No. of Investments 60
Total Amount Invested ₹120,000.00
Total Units Purchased 3186.80
Investment Value as on 03.12.18 ₹1,70,302.59
Latest NAV ₹53.44(as on 03.12.18)

From the below interactive table you can easily find the NAV on different dates during the last 5 years and the number of units acquired by investing Rs. 2000 monthly. Total units acquired 3186.80 and market value of the investment as on 03.12.2018 comes to ₹1,70,302.59/- which is 1.419 times of your investments. So, this ELSS is in the 3rd position of my Best ELSS Funds 2019.

Fund Portfolio

Now let’s have a close look at the top 10 stocks where this fund has invested
Top 10 holdings of Invesco India Tax Plan is given below.

Name of Company Value( Cr.) Holding(%)
HDFC Bank Ltd 53.52 8.63
Infosys Ltd 44.38 7.16
Reliance Industries Ltd 44.18 7.12
ICICI Bank Ltd 38.05 6.14
Kotak Mahindra Bank Ltd 26.37 4.25
Indusind Bank Ltd 25.86 4.17
Maruti Suzuki India Ltd 24.56 3.96
Larsen & Toubro Ltd 23.58 3.8
Housing Development Finance Corp Ltd 19.24 3.12
Cipla Ltd. 18.45 2.97

Let’s take a look at this fund’s industry wise allocation

Sector % Allocation
Financial 33.19
Industrial 9.09
Technology 13
Basic Materials 1.29
Consumer Cyclical 16.91
Utilities Services 4.47
Healthcare Services 5.7
Energy Services 11.25
Consumer Defensive 5.1

Best ELSS Funds 2019Is ELSS taxable after 3 years?

Yes, ELSS is presently taxable after 3 years. Long term capital gains on the sale of equity shares or units of mutual funds are taxable now and it was introduced in the budget 2018. ELSS funds are now taxable even after your each investment has completed the maximum lock in period of 3 years from the dadte of purchase.
All the gains up to grandfathered date i.e. 31.01.2018 is completely tax free. Thereafter, long term capital gains on mutual funds above Rs. 1 Lakh is taxable @10% with indexation benefits.

Is investing in Best ELSS Funds for 2019 a good idea?

Yes, this is really a good time to invest in the best ELSS Funds 2019. Because, markets are correcting and it may continue to do so till the next year before the election. Investors are really exposed to market correction from this level and may be this would enable them to acquire more units if they choose the SIP route for investments. Also, in ELSS funds there is no scope for frequent portfolio churn out as ELSS Funds are locked for 3 years. Therefore fund managers are in a position to buy and sell stocks as per their plan for getting maximum returns.

Can we invest more than 1.5 lakh in Best ELSS Funds for 2019?

Technically, there’s no such problem in investing more than Rs. 1.5 lakhs on Best ELSS Funds 2019, but the maximum tax deduction under section 80c is subject to maximum Rs. 1.5 lakhs. This is the right time to invest in Best ELSS funds 2019 for long term wealth creation.

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