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This ELSS fund turned a Rs 10,000 SIP into a whopping Rs 9.39 crore in 26 years. Details here

ELSS funds are diversified equity funds that invest in companies with a range of market capitalizations, including large, mid-cap, and small-cap companies.

ET Now Digital

Updated Sep 29, 2022, 07:24 IST

The main objective the ELSS (Equity Linked Savings Scheme) mutual fund serves is it helps in saving income tax. That's why they are also known as tax-saving funds. Under the Income Tax Act, there is a provision of Section 80C which allows taxpayers to invest up to Rs 1.5 lakh in specific investment tools and claim it as a deduction from their taxable income.

Besides tax advantages, ELSS funds also give bumper returns at par with their peers and sometimes outperform them. ELSS funds are diversified equity funds that invest in companies with a range of market capitalizations, including large, mid-cap, and small-cap companies.

Take an example of an ELSS fund that has performed par excellence since its inception 26 years ago. HDFC Taxsaver Fund has completed its 26 years and made people crorepatis who stayed invested all this while.

HDFC Taxsaver Fund Regular Plan - Growth Option was launched in March 1996. As of March 31, 2022, the fund has produced SIP returns of 21.27 percent, outperforming the NIFTY 500 TRI benchmark at 15.45 percent and the NIFTY 50 additional benchmark at 14.35 percent during that time. A Rs 10,000 SIP translates into Rs 31.20 lakh over 26 years. This Rs 31.20 lakh would have given a corpus of Rs 9.39 crore by March 31, 2022.

The fund has given a one-year return of 26.05 percent as of March 31, 2022, which is higher than the benchmark performance of 22.29 percent, returns of 11.64 percent in the previous three years, and returns of 9.44 percent in the previous five years. Since its inception, the fund has produced an annualized return of 22.24 percent, which is higher than the benchmark performance of 14.25 percent.

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