Enhancing your financial portfolio has become increasingly important for the present generation. However, one should try to prioritize quality over quantity. Increasing your investment in terms of the number will not help you in earning more. But, there are chances you may invite more risk. The experts suggest that getting hold of a few of the best mutual funds would help achieve your financial goal.
Currently, there are over 2000 active schemes to choose from. With such a wide range of options available to invest in a mutual fund, the chances are high to find the right ones which would cater to your needs. Before delving deep into the mutual fund’s world, it is important to analyze the mutual fund market and consider funds with high turnover that would annually appreciate wealth.
From the broad-spectrum of mutual funds, an Equity Linked Saving Scheme (ELSS) is considered to be one of the options which an investor may opt for. It is one of the tax-saving mutual funds, which helps in the tax deduction up to Rs. 1.5 lakhs. However, it has a lock-in period of 3 years. If you have a higher risk-tolerance and a long term financial goal, you may consider investing in the best ELSS funds.
The high returns and tax saving option on availing the ELSS makes it more attractive in comparison to the other financial products in the market. Once the importance of holding ELSS is acknowledged, you might be curious to know the best of the options available to invest in ELSS. So, coming to your rescue, the following list renders the best ELSS funds in the market to invest this year.
List of best ELSS mutual funds
On the basis of the consistency in performance, and downside risk, the best ELSS funds have been compiled to suggest you the best options available.
Motilal Oswal Long Term Equity Fund
It offers an open-ended ELSS which has a statutory lock-in period of 3 years. This shortest lock-in period allows the fund manager to make better decisions so that your fund is not hit adversely with a sudden bout of volatility. The fund manager does not charge any entry load and exit load for investing in ELSS.
Aditya Birla Sun Life Tax Relief 96
It is highly suitable for investors who are looking to invest for at least 3 years and would be able to enjoy income tax benefits apart from higher returns expectations. The fund managers provide assistance to make the best decision while investing in ELSS funds.
Invesco India Tax Plan
Its distinctive feature makes it more attractive than the other best ELSS funds. The fund manager closely follows a multi-cap approach under which the scheme invests 65% of the fund in large-sized companies and about 25.3% in mid-sized companies and the rest in small-sized companies. Besides, this investment approach, the fund manager follows a very value-conscious portfolio. Due to high exposure to the large-sized companies, the scheme’s performance has been encouraging even during the crisis in the market.
Axis Long Term Equity Fund
It is a diversified equity-linked saving scheme (ELSS) which usually invests in large-sized and mid-sized companies. It offers a 3-year lock-in period which ensures that the fund stays invested with equities and does not get perturbed by the market trough and crest. The fund managers look through the interim volatility before investing. It comes with a dual advantage of building wealth and saving tax of the investors. On being associated with the asset class, it holds the potential to beat inflation and generate wealth. It mainly caters to the need of long term targeted loan such as for children’s higher education, vacation, retirement and medical expenses.
Mirae Asset Tax Saver
It aims to invest in equity and equity-related instruments to generate long term wealth benefits while providing tax savings schemes every year. It offers to invest through a flexible investment approach across the market capitalisation, theme and styles. It helps you to hold a diversified portfolio across stocks and sectors. Apart from the flexible investment approach, they also broaden the horizon of the portfolio through the bottom-up approach which focuses on investing in growth-oriented businesses. The minimum investment amount starts from Rs. 500 onwards.
DSP Tax Saver
It is ideal for investors who are willing to attain capital appreciation over a medium to long term investment plan. Under this scheme, the growth dividend has a payout option. The risk associated with the scheme is moderately high. The minimum application amount is Rs. 500 which is subject to 3 years lock-in period. Apart from equity security, the scheme offers the investor to claim tax deductions of up to Rs. 1.5 lakh per financial year.
The benefits being offered by these companies are more or less similar, yet the difference lies in the services and the accessibility to your financial portfolio. There is no sudden outflow option for this scheme as the investment has to be locked-in for a minimum of 3 years. While sticking to the lock-in period, the best ELSS funds have historically given higher returns compared to alternative options in the financial market. It is, therefore, advised to make use of the available information in the best way possible and invest in the best ELSS funds prudently.