Best ELSS Mutual Funds 2020 | Top 4 Tax Saving Mutual Funds for 2020

With the beginning of the New Year 2020, the tax-saving season has started. This is the time of the year when most of us look for the best tax saving options to save taxes. So, today I thought to write a blog post on 4 Best ELSS Mutual Funds 2020 | Top 4 Tax Saving Mutual Funds for 2020.

There are various investment options available for getting tax benefits under Section 80C. Most of us know the common tax saving instruments like PPF, EPF, NSC and Life Insurance Premium. But only a few people know about ELSS mutual funds which is one of the best tax saving investment options.

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What is ELSS Mutual Fund?

Equity Linked Savings Scheme is popularly known as ELSS. ELSS is a diversified equity mutual fund scheme offered by mutual fund companies. ELSS mutual funds have a lock-in period of three years. These tax saving mutual funds offer tax benefits for an investment of up to Rs. 1.5 lakh under Section 80C.

Advantages of investing in ELSS Mutual Funds

ELSS fund is one of the best tax saving investment options for an investment of Rs 150,000 u/s 80C. ELSS mutual funds allow you to save tax while earning high returns from the equity market over a long period.

They have a lock-in period of 3 years which is much lower than the minimum 5 years for traditional tax-saving instruments. You may stay invested after the completion of 3 years period.

You can invest in ELSS mutual funds via the SIP route. These Tax saving mutual funds are also regulated by Securities and Exchange Board of India (SEBI).

Disadvantages of investing in ELSS Mutual Funds

All the ELSS mutual funds are exposed to equity market-related risks. The returns are not guaranteed because ELSS mutual funds invest in equity and equity-related products.

The tax benefits are limited. The tax deduction of Rs.1.5 lakh inclusive of all investments under Section 80C.

They have a lock-in period of 3 years. Therefore, you are not allowed to exit before the completion of three years.

Methodology used in selecting the Best ELSS Mutual Funds 2020

These Best ELSS Mutual Funds to invest in 2020 are selected based on the following factors.

1. ELSS mutual funds that have generated superior returns in the last 3, 5, 7 and 10 years considered here.

2. Selected funds have AUM (Assets Under Management) of more than Rs. 2000 Cr. Higher Assets Under Management (AUM) indicates that the mutual fund scheme trusted by a large number of investors.

3. CRISIL ranked these funds as Rank-1, Rank-2, and Rank-3. Rank1 is the highest rank. CRISIL is a global analytical company providing ratings, risk, and research and policy advisory services.

4. ELSS schemes that are rated as 5 stars and 4 stars (Out of 5) by Value Research considered here. Higher is better.

4 Best ELSS Funds to invest in 2020

Here is the list of 4 Best ELSS Funds to invest in 2020. The list is of Top 4 Tax Saving Mutual Funds for 2020

1. Axis Long Term Equity Fund

2. Mirae Asset Tax Saver Fund

3. DSP Tax Saver Fund

4. Tata India Tax Savings Fund

Best ELSS Funds 2020 | Top Tax Saving Mutual Funds for 2020

Following are the Best ELSS Funds to invest in 2020:

Axis Long Term Equity Fund – Regular Plan – Growth

Axis Long Term Equity Fund is at number one in the list of the Best ELSS Funds. This scheme is a star performer in the ELSS category. The scheme has been performing well year after year since its inception in December 2009. The fund has given returns of 17.44% in the last 3 years.

The NAV is Rs.49.2832 as on January 1, 2020. The expense ratio of this ELSS fund is 1.68% as on November 30, 2019. The fund’s largest exposure is in the financial sector.

This scheme is currently being managed by Mr. Jinesh Gopani. He has been managing this scheme since April 1, 2011. You can invest in this scheme with an amount as low as Rs. 500 in lump sum mode or via SIP.

Mirae Asset Tax Saver Fund – Regular – Growth

Mirae Asset Tax Saver Fund is one of the best ELSS funds to invest in. The fund has been performing well since its inception in December 2015. This has given returns of 14.21% and 18.17% in the last one and three years respectively.

The NAV is Rs. 19.0630 as on January 1, 2020. The expense ratio of this scheme is 1.89% as on November 30, 2019.

The fund is currently being managed by Mr. Neelesh Surana. This scheme also allows you to invest as low as Rs. 500 in lump sum mode or via the SIP route.

DSP Tax Saver Fund – Regular – Growth

DSP Tax Saver Fund seeks to generate medium to long-term capital appreciation from a diversified portfolio. The fund’s largest exposure is in the financial sector. This ELSS fund has given 10.89% annualized returns in the last 5 years and 13.18% annualized returns in the last 10 years.

The NAV of the fund is Rs. 51.7020 as on January 1, 2020. The expense ratio of the fund is 1.92% as on November 30, 2019.

This scheme is currently being managed by Mr. Rohit Singhania. He has been managing this scheme since July 16, 2015. You can invest in this scheme with a sum as low as Rs. 500/- in lump sum mode or via the SIP route.

Tata India Tax Savings Fund – Regular – Growth

Tata India Tax Savings Fund has also been performing well since its inception in March 1996. This ELSS fund has delivered 11.76% and 13.02% returns in the last 5 & 10 years respectively.

The NAV of this scheme is Rs. 62.2165 as on January 1, 2020. The expense ratio of this scheme is 2.09% as on November 30, 2019. The fund’s largest exposure is in the banking and financial sector.

This scheme currently managed by Mr. Ennettee Farnandes. This fund also allows you to invest a sum as low as Rs. 500 in lump sum mode or via SIP.

Best ELSS Funds to invest in 2020 | Top Tax Saving Mutual Funds for 2020

Disclaimer: The information in this post (4 Best ELSS Mutual Funds 2020 | Top 4 Tax Saving Mutual Funds for 2020) is strictly for general information purposes only. ELSS funds exposed to equity market-related risks. Therefore, there is no guarantee of returns in ELSS mutual funds. Past performance of an ELSS mutual fund may or may not repeat in the future. Please consult a financial or mutual fund advisor before making any investment decision.

4 Best ELSS Mutual Funds 2020 | Top 4 Tax Saving Mutual Funds for 2020