Deep Dive Mini Observation 5

Lets analyse one of the ELSS funds with track record from 2010–2023

Today’s pick : Canara Robeco ELSS Tax Saver

Canara Robeco ELSS Tax Saver has delivered a compounded
annual growth rate (CAGR) of 8.64% from 2010 to 2020. So if you invested Rupees 10,000 in 2010 then your invested amount would turn into Rupees 31,882, making your investment almost triple in 10 years.

If you take a closer look at the journey of investor, the fund did not perform from 2010 to 2014 due to bear phase — invested amount 10,000 was converted only to 14,187. If the investor had exited during this period due to lack of patience or due to lack of performance of the fund, the investor would have missed the huge gains in the following years.

The same fund continued to leap forwards to higher gains returning investors with almost 3.2 times of the invested amount by the end of 10 years.

This same fund continued to garner good returns from 2020–2022 converting 31,882 at the beginning of year 2020 to 52,364 by the end of year 2023.

Despite many ups and downs during investment journey, this fund continued to deliver a CAGR of 14% from 2010–2023 a period of 13 years. A patient investor is been rewarded handsomely if they stayed invested in the fund and converted their investments into 5.2 times the returns.

Performance of Canara Robeco ELSS Tax Saver is one of the clear examples of how staying invested in equities for long term is the way to go for long term wealth creation.

If you didn’t know what ELSS/Tax Saver Mutual fund is, ELSS is an equity-linked savings scheme (ELSS) that invests in a diversified portfolio of Indian stocks across sectors and market capitalizations. By investing in this fund, you can claim a deduction of up to Rs 1.5 lakh from your taxable income under Section 80C of the Income Tax Act. Moreover, you can also benefit from the long-term capital appreciation potential of the Indian equity market.

Disclaimer:

This is not a recommendation. This article is for informational and educational purposes only. It is not intended to provide investment advice or to endorse or recommend any particular mutual fund. The analysis presented in this article is based on historical data and does not guarantee future performance. Investors should do their own research and consult a professional financial advisor before making any investment decisions. Investing in mutual funds involves risks, including the possibility of losing some or all of your initial investment.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme.

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