Synopsis– Equity Linked Savings Schemes (ELSS) are mutual fund schemes that come with tax-saving benefits making them popular for investors in 2025. This list represents the 7 ELSS funds with good multi-year CAGR, risk adjusted returns, and consistency.
Equity Linked Savings Schemes (ELSS) are among one of the most preferred investment options for Indian taxpayers who are aiming to save tax under Section 80C while also trying to seek wealth through equity investments. With a mandatory lock-in of three years, which is the shortest among tax-saving instruments. The ELSS funds have gained popularity especially due to their potential for higher returns when compared to traditional tax-saving schemes.
For 2025, investors have several high-performing ELSS mutual funds to consider from. These funds are selected specifically based on their 3-year and 5-year compounded annual growth rates (CAGR), consistency in returns, fund size, expense ratios, and risk-adjusted performance metrics like alpha and Sharpe ratio. This article is going to give you a comprehensive overview of the top 7 best performing ELSS mutual funds in India for 2025.
1. Quant ELSS Tax Saver Fund
- 5-Year CAGR: 28.8%
- 3-Year CAGR: 16.7%
- Assets Under Management (AUM): Rs. 11,649 Crore
- Expense Ratio: 0.59%
- Quant ELSS Tax Saver Fund is notable for the highest 5-year growth among ELSS funds in 2025, making it a compelling choice for the long-term investors. Additionally, the fund’s relatively low expense ratio enhances its net returns, though its risk-adjusted returns as indicated by a lower Sharpe ratio.
2. Parag Parikh ELSS Tax Saver Fund
- 5-Year CAGR: 23.46%
- 3-Year CAGR: 18.21%
- AUM: Rs. 5,538 Crore
- Expense Ratio: 0.63%
- This fund stands out due to its strong risk-adjusted performance, and has a high alpha and Sharpe ratio , which signifies the fund manager’s ability to generate returns above the benchmark with controlled volatility. This fund is suitable for investors who are seeking a balance of growth and moderate risk.
3. SBI Long Term Equity Fund (ELSS)
- 5-Year CAGR: 23.05%
- 3-Year CAGR: 24.12%
- AUM: Rs. 27,791.08 Crore (making it one of the largest funds)
- Expense Ratio: 0.95%
- SBI Long Term Equity Fund is known for its consistent and robust 3-year performance, this fund is favoured by conservative investors who have a preference for large-cap stocks. It combines of sizeable fund strength with steady equity market exposure.
Also read: Top 7 Best-Performing Aggressive Hybrid Mutual Funds in India 2025 – Is Your Fund on the List?
4. Motilal Oswal ELSS Tax Saver Fund
- 5-Year CAGR: 26.9%
- 3-Year CAGR: 25.6%
- AUM: Rs. 4,414.88 Crore
- Expense Ratio: 0.64%
- Motilal Oswal ELSS has given a strong performance, which is supported by fundamental research-driven investing style. And attractive for investors interested in equity growth with rigorous stock selection focus.
5. Bank of India ELSS Tax Saver Fund
- 5-Year CAGR: 23.07%
- 3-Year CAGR: 17.35%
- AUM: Rs. 1,441.44 Crore
- Expense Ratio: 0.92%
- When compared to others in this list it is smaller, but comes with an impressive mid-term returns, making it suitable for risk-tolerant investors who are willing to explore less crowded funds with growth potential.
6. Franklin India ELSS Tax Saver Fund
- 5-Year CAGR: Approx. 24.74%
- 3-Year CAGR: Approx. 19.60%
- AUM: Rs. 6,705 Crore (approximate based on latest figures)
- Franklin India has been consistently delivers steady performance with a seasoned fund management team. Preferred by investors seeking stable growth combined with tax benefits.
7. HDFC ELSS Tax Saver Fund
- 5-Year CAGR: Approx. 25.33%
- 3-Year CAGR: Approx. 22.07%
- AUM: Rs. 16,579 Crore (approximate)
- This is a reliable fund with a diversified portfolio, which is good for medium to long-term investors. HDFC ELSS is a strong mix of large and mid-cap stocks that balance growth and risk.
Key Considerations for Investors
- Lock-in period: ELSS funds have a lock-in of three years which encourages the investor to take a longer-term view and this generally works in favour of equity investments.
- Tax benefits: Investments of Rs. 1.5 lakh per annum and less may be used as a claim for deduction at Section 80C of the Income Tax Act.
- Risk profile: Since ELSS funds invest predominantly in equities, they will have volatility in relation to the market. Investors will have to assess the fund they invest in keeping their risk profile in mind.
- Returns: The historical CAGR over 3 and 5 years is a good way to measure the fund performance, but historical returns cannot be interpreted as future performance.
- Expense ratio: Lowering expense ratios will enhance net returns, which is essential in the long-run, as net returns impact investors directly.
- Fund size and consistency: Large AUM will provide stability, consistency can also be measured in terms of certain parameters such as alpha and Sharpe ratio to measure risk-adjusted returns.
Those who are interested in Indian ELSS mutual funds in 2025 would be pleased that there are good options when seeking tax efficiency and equity growth potential. The Quant ELSS Tax Saver Fund is the best for 5-year returns, while the SBI Long Term Equity Fund is impressive for having the 3-year growth. And although the Parag Parikh ELSS Fund, Motilal Oswal ELSS Fund, and Franklin India ELSS Fund are not the leader of the pack, they still are great picks as they have been consistent, and risk adjusted. Clearly, investors will have to consider their investment horizon, risk tolerance, and quality of the investment management company, when investing in ELSS funds, if they would like to have the best opportunity for maximization of tax savings in order to create wealth.
Written by Adithya Menon
