Investors looking to build wealth while saving on taxes are finding great opportunities in Equity Linked Savings Schemes (ELSS). One of the standout performers in this category is the HDFC ELSS Tax Saver Fund, which has delivered stellar returns over the last 28 years. With just a monthly SIP of Rs. 3000, an investor could have built a corpus of Rs. 6 crore, thanks to an annual return rate of 23%. Here’s how this fund has helped investors achieve long-term financial growth.
The Power of SIP: Small Monthly Investments, Big Returns
The HDFC ELSS Tax Saver Fund was launched in March 1996 and has consistently performed well, earning it a top spot among tax-saving funds. Let’s take a closer look at how a small SIP grew into a fortune over the years:
- Monthly SIP Amount: Rs. 3000
- Total Investment (28 years): Rs. 10.18 lakh
- Annualized Return: 23.01%
- Final Corpus Value: Rs. 6.09 crore
This example demonstrates how a disciplined monthly investment of a small amount can create significant wealth over time.
Performance of Lump Sum Investments
Apart from SIPs, the fund has also delivered excellent returns for lump sum investors. A one-time investment of Rs. 50,000 at the time of the fund’s launch would now be worth over Rs. 2 crore. This translates to a 23.88% annual return over 28 years, delivering close to 400 times the original investment value.
Short-Term to Long-Term Performance Highlights
The fund’s performance has remained consistent across different timeframes, making it suitable for both short-term and long-term investors.
- 1-Year Return: 43.53%
- 3-Year Return: 22.49% per annum
- 5-Year Return: 23.00% per annum
- 10-Year Return: 14.14% per annum
- 20-Year Return: 18.10% per annum
- Since Launch: 23.88% per annum
Key Fund Details: Assets, Expense Ratio, and Minimum Investment
- Fund Size: Rs. 16,761 crore (as of September 30, 2024)
- Expense Ratio: 1.70%
- Minimum SIP Investment: Rs. 500
- Minimum Lump Sum Investment: Rs. 500
The fund primarily invests in equity markets with a focus on sectors like banking, telecom, IT, and pharma, ensuring a diversified portfolio.
Top Holdings of HDFC ELSS Fund
The fund holds stocks from leading companies across sectors, including:
- ICICI Bank, HDFC Bank, Axis Bank
- Bharti Airtel, Infosys, HCL Technologies
- Maruti Suzuki, Cipla, SBI Life Insurance
What is an ELSS Fund, and Why Should You Consider It?
An Equity Linked Savings Scheme (ELSS) is a mutual fund that offers tax-saving benefits under Section 80C of the Income Tax Act. Investors can claim a deduction of up to Rs. 1.5 lakh annually by investing in ELSS. The lock-in period for ELSS is three years, encouraging long-term investments.
ELSS funds invest heavily in equities, with at least 80% of the portfolio allocated to stocks. While these funds offer high return potential, they come with market risks, so investors are advised to invest with a long-term perspective.
By blending wealth creation with tax-saving benefits, the HDFC ELSS Tax Saver Fund is a strong option for investors seeking long-term growth. However, it’s essential to understand that mutual funds are subject to market risks, and past performance may not guarantee future returns.
(Note: It is not guaranteed whether the past returns in any equity fund will continue or not. This may or may not continue in the future. There are risks in the market, so seek expert advice before investing.)
