Every year, I give you names of top 3 equity linked saving schemes. I pick the best tax saver mutual fund on the basis of consistent performance, risk, volatility and management.
I have also given a list of best ELSS mutual fund for 2016 in the beginning of the year. It has been more than 8 months after I released the list of top ELSS. Meanwhile share market has given a good return. So, people are returning to ELSS in flocks. I understand that people want a fresh assessment before investing in ELSS. In my opinion, it is not fair to change the ranking within such a short span. However, It would be prudent to assure ourselves. Thus, I am doing a reality check of the top 3 best ELSS funds of 2016.
But, in my opinion, it is not fair to change the ranking within such a short span. However, It would be prudent to assure ourselves. Thus, I am doing a reality check of the top 3 best tax saver mutual funds of 2016.
- 1 Top 3 Tax Saver Mutual Fund for 2016
- 2 Performance of Tax Saver Mutual Funds in 2016
- 3 Performance of Top Tax Saver Funds
- 4 Strong Contenders For Best Tax Saver Fund of 2017
Top 3 Tax Saver Mutual Fund for 2016
- Birla Sun Life Tax Plan Growth
- Axis Long Term Equity Growth
- DSP BlackRock Tax Saver Fund Growth
After thorough research, I have found these 3 funds worthy of the top ranking. These funds have given consistently good return with low risk. Let us understand the market condition of last 8 months.
Also Read: Best Tax Saver Mutual Fund 2017
Performance of Tax Saver Mutual Funds in 2016
The year 2016 started on a bad note. The January and February months have seen a decline in the share market. The index of top 200 companies came down 13% during this period. However, we have seen recovery after this. Overall, this year, the S&p BSE 200 has seen a rise of 11.6%. This return is neither very good not bad. It is still better than the FD, EPF and PPF.
The category of the tax saver mutual fund has also given a better return than the index of top 200 companies. The tax saver category gave a return of 12% during first 8 months of 2016. It seems remaining 4 months would be also good for the equity linked saving schemes.
Now it is time to check te performance of top 3 best tax saver mutual fund of 2016. I am giving you the return of these funds
|Return (1/1/2016- 31/08/2016)|
|Birla Sun Life Tax Plan Growth||9.28%|
|Axis Long Term Equity Growth||9.04%|
|DSP BlackRock Tax Saver Fund Growth||18.56%|
|S&P BSE 200||11.58%|
It has not been very good for the Birla Sun Life Tax Plan and Axis long term equity. Both of these funds were underperformed the category average and S&P BSE 200 benchmark. However, the BSP Black Rock tax saver fund has rocked during this period.
But, you would agree that performance of 8 months should not be the factor to change your decision. That is why I am still sticking to the ranking. However, It has made me cautious and I would further check the performance of these fund during longer periods.
Performance of Top Tax Saver Funds
|1 year||3 year||5 year|
|Birla Sun Life Tax Plan Growth||11.85%||27.28%||18.17|
|Axis Long Term Equity Growth||7.96%||30.02%||21.63%|
|DSP BlackRock Tax Saver Fund Growth||20.50%||27.73%||19.95%|
|S&P BSE 200||12.09%||16.64%||12.22%|
|As on 22/09/2016|
Birla Sun Life Tax Plan
Now you have a clearer picture. It is true that recent underperformance has dragged down the return of Birla Sun Life Tax Plan. But there is nothing to panic. You can monitor it for another 6 months. As, the one year, 3 year and 5-year return are not at worrisome level. The fund has good track record.
Axis Long Term Equity Fund
The spectacular return of Axis Long term equity fund has been a surprise to many. A five-year-old ELSS has marched ahead of veterans. Now there seems some fatigue. But, you should not worry as fundamentals and fund managers are intact. It can recover swiftly. The year 2016 has not been good for this, it lagged behind the category average. However, during the last three year period, it is still a champion.
DSP Blackrock Tax Saver Fund
DSP Blackrock Tax Saver Fund had a good run during 2016. It remained way ahead in 2016. Becuase of the splendid performance, it is getting closer to Axis Long Term Equity Fund in 3 and 5-year return.
Strong Contenders For Best Tax Saver Fund of 2017
If we don’t give too much weightage to recent performance, the above-selected funds are the best tax saver mutual funds. However, these may face a serious challenge from two tax saver funds. These two funds can unseat the present best ELSS.
Franklin India Taxshield Fund
The Franklin Templeton is the most profession fund management company. The funds from this AMS are known for their consistent performance. The Franklin Templeton is also a long-race horse. It is the only ELSS which carries low risk.
Tata India Tax Saving Fund
Tata India tax saving fund is gradually going towards the top. The takes below average risk. Presently, It is the only ELSS which has given above average return during last 1, 3 and five years.
This post is an assessment of best tax saver mutual fund of 2016. I have presented you the fair picture. Now you can take a decision. However, I assume that you know the benefits of tax saver funds. You can also read the comparison of ELSS Vs equity mutual fund and ELSS vs PPF.