Six ELSS funds to consider for tax planning

Here are the six ELSS funds you can consider. Mirae Asset ELSS Tax Saver Fund Fund philosophy The fund employs a bottom-up stock selection approach and incorporates filters to choose companies based on growth, ROCE (return on capital employed), management and valuation. It follows the GARP (growth at a reasonable price) strategy and looks for value in growth companies. Performance After a rare blip in 2022, it showed signs of revival in the first half of 2023. But it ended the year on a slightly sluggish note. The underperformance has declined its rating from 5 to 4 stars for the first time since its inception in 2015. The financial sector has been painful, where the fund has an overweight position compared to its peers and the benchmark. Further, the energy sector presented a varied scenario, wherein a roller-coaster performance of Reliance Industries and Gujarat State Petronet offset the lifting done by NTPC. Our take Despite the setback, Mirae Asset ELSS Tax Saver Fund stands tall in consistency, outclassing its peers and the benchmark in five-year rolling returns. The fund continues to remain one of the best tax-saving investment options. Bandhan ELSS Tax Saver Fund Fund philosophy Having predominantly a buy-and-hold strategy, the fund aims to strike a balance between earning growth and valuation multiples. With the strategy to keep large-cap holdings between 50-70 per cent of the portfolio, it maintains a tilt towards mid and small caps. However, the latter's exposure has been brought under 25 per cent in recent quarters, as they believe that large caps appear relatively more appealing from a valuation perspective and continue to favour sectors where valuations are at long-term averages. Performance The fund had been outperforming its benchmark and the category for four years in a row, which led to a rating upgrade from 4 to 5. Although it faced minor hiccups during the last quarter of 2023, it remains steadfast in its commitment to long-term performance. The overweight exposure in the automobile sector has paid off, wherein mid- and small-cap names like Bharat Forge and Sandhar Technologies have done well. Suzlon Energy, NTPC, NCC and Hindalco Industries are the other stocks that have delivered stellar returns. Our take Despite Bandhan ELSS Tax Saver Fund's current inclination towards large-cap stocks, it remains the top choice for aggressive tax-savers seeking mid-cap and small-cap exposure. DSP ELSS Tax Saver Fund Fund philosophy The fund manager adopts a blended approach, i