Latest ELSS Fund Performance 2025 | Top ELSS Returns & Updates
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Latest ELSS Fund Performance 2025: Which Tax-Saving Funds Are Doing Well?
Equity Linked Savings Schemes (ELSS) have held their place as one of India’s most popular tax-saving options under Section 80C. For many investors, especially first-timers, ELSS funds are a practical way to save up to ₹1.5 lakh on taxable income each year, while letting that money grow in the stock market. Unlike other 80C instruments like PPF or tax-saving FDs, ELSS offers market-linked returns along with the shortest lock-in period of just three years. That mix of equity growth and tax relief keeps it at the top of many investors’ lists.
Why ELSS Funds Still Work in 2025
Over the last few years, equity markets have seen plenty of ups and downs. In 2024, a strong rally in mid-cap and small-cap stocks boosted returns for many aggressive funds. As we step into the middle of 2025, returns have cooled off slightly but the top ELSS funds still show healthy five-year average growth rates, often ranging between 25% and 35% CAGR.
Funds that stuck to a clear strategy — mixing large caps for stability and mid-caps for higher growth — have delivered the best risk-adjusted returns. This is important for anyone choosing an ELSS fund now because your money stays locked in for at least three years. Picking funds with a track record of managing volatile phases well makes a big difference.
Top ELSS Funds to Watch Right Now
Based on the latest AMFI data, ET Money and Smallcase reports (as of Q2 2025), here are five funds with standout returns as on
1) Quant ELSS Tax Saver Fund
5-year CAGR: ~34%
Assets: ₹11,300+ crore
Why it stands out: Actively managed, bold mid-cap exposure. This fund is for investors who can handle more swings.
2) SBI Long Term Equity Fund (ELSS)
5-year CAGR: ~29%
Assets: ₹29,600+ crore
Why it stands out: One of India’s largest ELSS funds. It balances large- and mid-cap bets well.
3) Motilal Oswal ELSS Tax Saver Fund
5-year CAGR: ~29%
Assets: ₹4,350 crore
Why it stands out: Strong calls in new-age companies, solid returns during bull runs.
4) HDFC ELSS tax saver fund
5-year CAGR: ~28%
Assets: ₹16,400 crore
Why it stands out: Long track record, popular with first-timers, stable management style.
5) DSP Tax Saver Fund
5-year CAGR: ~28%
Assets: ~₹8,000 crore
Why it stands out: Balanced portfolio, steady risk management, doesn’t chase trends.
These numbers can change every month, so always check each AMC’s latest factsheet before investing.
What About New ELSS Funds This Year?
In 2025 so far, there haven’t been any major new ELSS launches. Instead, mutual fund houses have pushed more small-cap and thematic funds, which don’t have lock-ins. New ELSS schemes are rare because AMCs prefer to grow existing ones with a proven track record and loyal SIP flows.
Still, if you see a new ELSS NFO being advertised, do your homework. New funds sometimes offer fresh ideas but always check who is managing it, what stocks it plans to hold, and how it plans to stand out in a crowded market.
Understanding the Lock-In: Don’t Get Caught Out
Many new investors forget how the lock-in works. For ELSS, every unit you invest is locked for three years from the date of purchase. So, if you start a SIP, each instalment has its own lock-in period.
The good news is you can redeem your units without any exit load once the lock-in ends. But do remember that any gains above ₹1 lakh in a financial year attract a 10% long-term capital gains tax.
It’s smart to plan ahead if you need your money for a goal. Don’t wait until the last week of March hoping to claim deductions and redeem funds at the same time — it doesn’t work that way!
Mistakes Many Investors Make with ELSS
One common mistake is chasing last year’s top fund blindly. It’s tempting to pick the fund with the highest past returns, but that doesn’t always mean it will do the same next year. Always check if the fund’s strategy fits your risk comfort.
Another error is switching funds too soon. Some investors panic when a fund underperforms for a quarter and jump ship. That resets the lock-in clock and defeats the purpose of staying disciplined.
Timing lumpsum investments badly is another pitfall. Many people wait till March, dumping large amounts to save tax last-minute. A better way is to spread your investments with a SIP across the year. This averages out the cost and helps you ride out market ups and downs smoothly.
Tips to Pick the Right ELSS
Start early: Don’t rush in March. Start your SIP now to spread risk.
Don’t chase top return alone: See consistency and how the fund does in bad years.
Read the factsheet: It’s boring but tells you how your money is invested.
SIP helps average cost: Instead of lumpsum, SIP works well for volatile equity funds.
Stay for 5+ years: The lock-in is three years, but equity works better if you stay longer.
Conclusion
ELSS funds combine tax-saving benefits and the chance to grow your money with the market. They’re not risk-free, but they reward patience and discipline.
Funds like Quant, SBI, Motilal Oswal, HDFC, and DSP have proven they can manage changing markets well, delivering healthy returns. But don’t just copy lists. Always match the fund’s approach with your own comfort level.
In 2025, a good ELSS plan is simple: start early, stay invested, keep an eye on your returns, and let time do the work. Tax-saving can be smart and rewarding — if you do it right.
Disclaimer:
This article is for information only. It is not investment advice. Always check factsheets or talk to a trusted financial advisor before you invest.