These 7 ELSS funds underperformed benchmarks in three consecutive years

Seven ELSS funds or tax saving mutual fund schemes have underperformed their respective benchmarks in the last three years (2021, 2022, and 2023), an analysis of yearly returns by the category showed. However, all these schemes failed to offer decent returns. They offered three-year returns of around 2.04-31.89% in the last three years.

There were around 36 ELSS schemes that have completed three years in the market. Out of these 36 ELSS schemes, seven schemes —Aditya Birla SL ELSS Tax Saver Fund, Axis ELSS Tax Saver Fund, Edelweiss ELSS Tax saver Fund, LIC MF ELSS Tax Saver, Shriram ELSS Tax Saver Fund, Sundaram Diversified Equity, and Groww ELSS Tax Saver Fund— have underperformed their respective benchmarks in three consecutive years from 2021 to 2023. (See table for details)

ELSS Funds: Consistent Underperformers

Benchmarks		2021	2022	2023
NIFTY 500 – TRI		31.60%	4.25%	26.91%
S&P BSE 100 – TRI		26.53%	6.03%	23.23%
S&P BSE 500 – TRI		31.63%	4.77%	26.55%
Scheme	Benchmark	2021	2022	2023
Aditya Birla Sun Life ELSS Tax Saver Fund	NIFTY 500 – TRI	12.69%	-1.43%	18.89%
Axis ELSS Tax Saver Fund	NIFTY 500 – TRI	24.54%	-11.97%	21.96%
Edelweiss ELSS Tax saver Fund	NIFTY 500 – TRI	30.36%	-0.08%	26.77%
LIC MF ELSS Tax Saver	NIFTY 500 – TRI	26.23%	-1.61%	26.27%
Shriram ELSS Tax Saver Fund	NIFTY 500 – TRI	18.82%	2.11%	24.53%
Sundaram Diversified Equity	NIFTY 500 – TRI	31.53%	4.03%	23.31%
Groww ELSS Tax Saver Fund	S&P BSE 500 – TRI	19.71%	2.78%	25.46%

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Source: ACE MF, Yearly returns as on January 29, 2024
Axis ELSS Tax Saver Fund, the largest scheme in the ELSS category based on assets managed, failed to beat its benchmark in the last three years. The scheme manages assets of around Rs 34,299.84 crore.

Aditya Birla Sun Life ELSS Tax Saver Fund failed to beat its benchmark in 2021, 2022, 2023. The scheme is benchmarked against Nifty 500 – TRI.

We considered regular and growth options for the analysis. We analysed the yearly performance of ELSS schemes for a period of five years from 2019 to 2023 and considered the ELSS schemes that have underperformed their respective benchmarks for three consecutive years.
These schemes are benchmarked against NIFTY 500 – TRI, S&P BSE 100 – TRI, and S&P BSE 500 – TRI.
Note, this is not a recommendation. The main purpose of the exercise was to find out which ELSS schemes have continuously underperformed against their respective benchmarks in the last three years.

One should not make investment or redemption decisions based on the above exercise. One should always consider investment horizon, risk appetite, and goals before making any investment decision.

If you are looking for recommendations, see:
Best tax saving mutual funds or ELSS to invest in 2024

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