Mutual Fund ELSS: Investors can get high returns with tax benefits in the Equity Linked Savings Scheme (ELSS) category of mutual funds. ELSS is also an investment scheme like other equity mutual funds.
HDFC Mutual Fund Tax Savings Scheme: Investors can get high returns with tax benefits in the Equity Linked Savings Scheme (ELSS) category of mutual funds. ELSS is also an investment scheme like other equity mutual funds, although most of these schemes have a lock in period of 3 years. This category of mutual funds is also very old and there are schemes up to 28 to 30 years old in it. If you look at the long term SIP or lump sum return graph, then HDFC Mutual Fund’s scheme HDFC ELSS Tax Saver Fund is number 1 in this category. Not only this, this scheme is also the top scheme of HDFC Mutual Fund in giving returns in 29 years.
HDFC ELSS Tax Saver Fund was launched in 1996. The AUM of this fund is around Rs 15,729 crore as of 31 December 2024. At the same time, the expense ratio of the regular plan is 1.7 percent. You can do SIP in this fund with a minimum of Rs 500. The benchmark for this is NIFTY 500 TRI. The fund managers for this scheme are Roshi Jain and Dhruv Muchhal. Investment in largecap is 75.6%, investment in midcap is 5.6%, investment in smallcap is 9.7%.
Investment strategy of the fund
- This scheme focuses on strong companies with growth drivers in the mid to long term, especially those operating in industries with better prospects.
- The strategy of the fund is to emphasize strong management with the ability to take advantage of opportunities while managing risk.
- The fund considers corporate governance, ESG sensitivity and track record of transparency.
- The fund manager is allowed to invest across all market cap segments.
- The scheme focuses only on valuations to provide a reasonable margin of safety, without relying on traditional parameters like P/E or P/B.
- The scheme is made keeping in mind the long term investment horizon, the stock selection will be strategic and long term in nature rather than tactical.
- This fund is a better option for investors who want to save tax. Who want to invest in a diversified equity portfolio and participate in the long term growth of quality companies.
SIP performance of the fund
- Annualised SIP return in 29 years: 22.32%
- Monthly SIP amount: Rs 3,000
- Total investment in 29 years: Rs 10,44,000
- Total value of SIP after 29 years: Rs 6,18,86,311
Lump sum performance of the fund
- Launch date: March 1996
- Lump sum return since launch: 22.38% p.a.
- One time investment: Rs 1,00,000
- Value of investment now: Rs 3,33,69,726
- 1 year lump sum return: 21.13%
- 3 year lump sum return: 21.29% p.a.
- 5 year lump sum return: 20.60% p.a.
- 10 year lump sum return: 12.67% p.a.
Top 10 stocks in the portfolio
- HDFC Bank : 9.92%
- ICICI Bank : 9.78%
- Axis Bank : 7.85%
- Cipla : 5.25%
- Bharti Airtel : .05%
- HCL Technologies : 4.08%
- SBI Life Insurance : 3.98%
- Kotak Mahindra Bank : 3.97%
- Maruti Suzuki India : 3.8%
- State Bank of India : 2.27%
Top 10 Sectors in Portfolio
- Financial Services : 40.7%
- Healthcare : 11.4%
- Automobile and Auto Components : 9.3%
- Information Technology : 7.9%
- Telecommunication : 5.0%
- Metals & Mining : 2.7%
- Capital Goods : 2.4%
- Consumer Durables : 2.0%
- Construction Materials : 1.9%
- Realty : 1.4%
Gets Tax Benefits
This scheme offers the dual benefit of tax savings and wealth creation. It comes with a lock-in period of 3 years and provides deduction from gross total income to individuals/HUFs for investment up to Rs 1.5 lakh in equity-linked savings scheme under Section 80C of the Income Tax Act, 1961. The fund invests 80-100% of its portfolio in equity or equity-related options. The equity strategy aims to generate high returns over the long term from a well-diversified portfolio comprising mid-cap and large-cap companies.
(Note: There is no guarantee that the past returns will continue in any equity fund. It may or may not be sustained in the future. There are risks in the market, so seek expert advice before investing.)
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