Equity Linked Savings Schemes (ELSS) remain one of the most popular tax-saving investment options for long-term investors. With a short lock-in of three years, equity exposure, and tax benefits under Section 80C, ELSS funds often attract investors looking to combine tax savings with wealth creation.
Among the crowded ELSS universe, Motilal Oswal ELSS Tax Saver Fund, SBI ELSS Tax Saver Fund and HDFC ELSS Tax Saver Fund stand out as consistent performers across market cycles. However, a closer look at 3-year, 5-year and 10-year returns, along with risk and portfolio composition, shows that leadership changes with time horizon.
ELSS performance snapshot: Rankings change with time
All three funds are among the top performers over three years, but their rankings differ as the investment horizon expands.
Top ELSS funds based on 3-year returns
Motilal Oswal ELSS Tax Saver Fund – Direct Plan – Growth leads with 24.18% returns, ranking 1st among 36 ELSS funds.
SBI ELSS Tax Saver Fund – Direct Plan – Growth follows closely with 23.97% returns, ranked 2nd.
HDFC ELSS Tax Saver Fund – Direct Plan – Growth delivers 21.73% returns, placing 3rd among 36 schemes.
Top ELSS funds based on 5-year returns
HDFC ELSS Tax Saver Fund moves to the top with 21.14% returns, ranking 1st.
SBI ELSS Tax Saver Fund posts 20.93% returns, securing 2nd position.
Motilal Oswal ELSS Tax Saver Fund records 20.31% returns, ranked 3rd.
10-year performance trend
Motilal Oswal ELSS Tax Saver Fund ranks No. 1 over 10 years.
SBI ELSS Tax Saver Fund stands at No. 4.
HDFC ELSS Tax Saver Fund ranks No. 5.
This clearly shows that short-term leadership does not always translate into long-term dominance, making consistency and risk profile equally important.
(Source: Value Research, AMFI)
Motilal Oswal ELSS Tax Saver Fund: High-conviction, high-volatility strategy
Launched in January 2015, the Motilal Oswal ELSS Tax Saver Fund has built a reputation for aggressive stock selection and concentrated bets.
Key fund details
Return since launch: 17.26% (annualised)
Benchmark: NIFTY 500 TRI
AUM: ₹4,341 crore
Expense ratio: 0.64%
Risk level: Very High
Risk and consistency
The fund’s standard deviation of 19.01% and beta of 1.22 indicate higher volatility than peers. While this raises risk, the fund has generated a strong alpha of 5.29, reflecting meaningful outperformance over the benchmark. Sharpe and Sortino ratios suggest returns have reasonably compensated investors for the risk taken.
Portfolio approach
The portfolio reflects a high-conviction, differentiated strategy, with exposure to companies such as MCX, Eternal, Piramal Finance, Muthoot Finance, One97 Communications, and Waaree Energies. The fund is less benchmark-heavy and more tilted towards select themes and emerging businesses.
SBI ELSS Tax Saver Fund: Scale, stability and consistency
Launched in January 2013, the SBI ELSS Tax Saver Fund is one of the largest ELSS funds in India, managing over ₹32,600 crore in assets.
Key fund details
Return since launch: 16.25% (annualised)
Benchmark: BSE 500 TRI
Expense ratio: 0.92%
Risk level: Very High
Risk and consistency
Despite being classified as very high risk, SBI ELSS shows lower volatility, with a standard deviation of 12.78% and beta of 0.95. The fund stands out on risk-adjusted metrics, with a Sharpe ratio of 1.33, Sortino of 2.10, and a strong alpha of 7.60.
Portfolio positioning
The fund maintains a large-cap, diversified portfolio, with major holdings including HDFC Bank, Reliance Industries, ICICI Bank, Tata Steel, ITC, Cipla, and Mahindra & Mahindra.
HDFC ELSS Tax Saver Fund: Lower volatility, steady compounding
Also launched in January 2013, the HDFC ELSS Tax Saver Fund focuses on quality large-cap stocks with a relatively conservative risk stance within the ELSS category.
Key fund details
Return since launch: 15.22% (annualised)
Benchmark: NIFTY 500 TRI
AUM: ₹17,163 crore
Expense ratio: 1.08%
Risk level: Very High
Risk and consistency
HDFC ELSS stands out for lower volatility, with a standard deviation of 10.87% and beta of 0.82. Strong Sharpe (1.33) and Sortino (2.19) ratios highlight efficient risk management, while alpha of 6.29 indicates consistent benchmark outperformance.
Portfolio structure
The portfolio has a strong financial sector tilt, with top holdings such as HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank, SBI Life Insurance, along with exposure to Maruti Suzuki, Bharti Airtel, and HCL Technologies.
ELSS funds: Benefits and suitability
ELSS funds offer:
Tax deduction up to ₹1.5 lakh under Section 80C
Shortest lock-in period (3 years) among tax-saving options
Equity exposure for long-term wealth creation
Potential for inflation-beating returns
They are best suited for long-term investors (5–10 years or more) who can stay invested through market ups and downs.
A word of caution on returns
While recent and medium-term returns look impressive, ELSS funds invest in equities and are subject to market risks. Rankings can change sharply across timeframes, as seen in the shifting leadership between SBI, Motilal Oswal and HDFC ELSS funds. Investors should avoid choosing funds solely based on short-term performance and instead focus on consistency, risk profile, and alignment with their financial goals.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.