Equity Linked Savings Schemes (ELSS) are a popular choice for investors looking to save on taxes while benefiting from equity market returns. With a lock-in period of three years, ELSS funds provide one of the shortest lock-in durations among tax-saving investment options under Section 80C of the Income Tax Act. Choosing the right ELSS fund is crucial to achieving your financial goals. Here, we list the top 10 ELSS funds to consider in 2025 based on their past performance, portfolio composition, and overall market reputation.
1. Axis Long Term Equity Fund
Axis Long Term Equity Fund has consistently delivered robust returns over the years. Its portfolio focuses on high-quality companies with a strong growth potential, making it a reliable choice for long-term investors.
- 1-Year Returns: 12.5%
- 3-Year CAGR: 18.7%
- Expense Ratio: 0.94%
2. Mirae Asset Tax Saver Fund
Known for its balanced approach, this fund invests across large-cap, mid-cap, and small-cap stocks. It has a well-diversified portfolio and a track record of outperforming its benchmark.
- 1-Year Returns: 15.2%
- 3-Year CAGR: 19.3%
- Expense Ratio: 0.80%
3. Canara Robeco Equity Tax Saver Fund
This fund emphasizes quality mid-cap and large-cap stocks, ensuring a good mix of stability and growth. It’s known for its relatively lower volatility compared to peers.
- 1-Year Returns: 13.8%
- 3-Year CAGR: 17.9%
- Expense Ratio: 0.73%
4. Kotak Tax Saver Fund
Kotak Tax Saver Fund is an excellent choice for risk-averse investors. Its portfolio leans toward large-cap stocks, offering steady returns with lower risk.
- 1-Year Returns: 11.9%
- 3-Year CAGR: 16.5%
- Expense Ratio: 0.97%
5. DSP Tax Saver Fund
DSP Tax Saver Fund’s portfolio includes a mix of cyclical and defensive sectors, making it a resilient option for diverse market conditions.
- 1-Year Returns: 14.0%
- 3-Year CAGR: 18.1%
- Expense Ratio: 0.87%
6. Invesco India Tax Plan
This fund focuses on high-conviction bets and has delivered consistent performance. Its diversified portfolio makes it an attractive option for long-term wealth creation.
- 1-Year Returns: 12.7%
- 3-Year CAGR: 17.3%
- Expense Ratio: 0.99%
7. Aditya Birla Sun Life Tax Relief 96
One of the oldest ELSS funds, this scheme has a well-diversified portfolio and a consistent performance record. It’s ideal for investors looking for stability with moderate risk.
- 1-Year Returns: 10.8%
- 3-Year CAGR: 15.7%
- Expense Ratio: 1.01%
8. SBI Long Term Equity Fund
Managed by one of the most trusted financial institutions, this fund focuses on blue-chip and high-growth companies, ensuring steady returns.
- 1-Year Returns: 11.5%
- 3-Year CAGR: 16.8%
- Expense Ratio: 0.89%
9. ICICI Prudential Long Term Equity Fund
This fund’s dynamic asset allocation strategy helps mitigate risks while maintaining competitive returns. It’s suitable for investors with moderate risk appetite.
- 1-Year Returns: 12.3%
- 3-Year CAGR: 17.2%
- Expense Ratio: 1.02%
10. HDFC Tax Saver Fund
HDFC Tax Saver Fund is a long-standing player in the ELSS category, with a focus on fundamentally strong companies. It’s a good option for conservative investors.
- 1-Year Returns: 10.5%
- 3-Year CAGR: 15.2%
- Expense Ratio: 1.10%
How to Choose the Right ELSS Fund
While selecting an ELSS fund, consider the following factors:
- Historical Performance: Analyze the fund’s track record over 3, 5, and 10 years.
- Expense Ratio: Opt for funds with a lower expense ratio to maximize net returns.
- Fund Manager Expertise: A skilled fund manager can make a significant difference in performance.
- Risk Tolerance: Choose a fund that aligns with your risk appetite and investment goals.
ELSS funds are an excellent tool for tax savings and wealth creation. The top 10 funds listed above are among the best options in 2025, catering to different investment styles and risk appetites. Remember, past performance is not indicative of future results. Always consult a financial advisor before making investment decisions.
