Motilal Oswal ELSS Tax Saver Fund has emerged as the top performer in the ELSS category over three years, delivering a 22.4% annual return. While the fund leads in long-term performance, investors should consider how different funds behave across shorter timeframes, as peers like SBI and Quant show varying strengths in different market cycles.
What Happened
Motilal Oswal ELSS Tax Saver Fund has taken the top spot for three-year annualized returns in the Equity-Linked Savings Scheme (ELSS) category. As of June 28, 2026, the fund reported a compound annual growth rate (CAGR) of 22.4% over the past three years. This return significanty outperformed its benchmark, which provided a 10.1% return during the same period. The data focuses on ELSS funds with an asset base exceeding ₹1,500 crore.
Comparing Peer Performance
While Motilal Oswal leads in the three-year duration, other funds show different strengths when looking at the broader market. The SBI ELSS Tax Saver Fund secured the second spot with an 18.7% three-year CAGR. Notably, the SBI fund manages a much larger asset base of over ₹30,955 crore, which is a significant factor for investors who prioritize fund size and liquidity. Meanwhile, the Quant ELSS Tax Saver Fund ranked third with a 17.9% CAGR over the same three-year window.
Understanding Different Timeframes
It is common for fund rankings to shift depending on the time period measured. While Motilal Oswal performs strongly over three years, the Quant ELSS Tax Saver Fund leads in shorter durations. For instance, Quant ELSS Tax Saver Fund delivered a 3.2% return over the last month and a 16.1% return over the last three months. It also led the category over a one-year period with a 10.9% return. This suggests that while one fund may excel in long-term wealth creation, others may be more responsive to recent market trends.
The Role of Benchmarks
Investors often look at how a fund performs against its specific benchmark to judge the manager's ability. Motilal Oswal ELSS Tax Saver Fund’s performance is notable because it beat its benchmark by 12.3 percentage points over the three-year period. In the last year, even when the benchmark saw a decline of 3.5%, the fund managed to perform significantly better, outshining the benchmark by 9.4 percentage points. This consistent gap highlights the fund's strategy of active stock picking compared to the broader market index.
What Investors Should Track Next
When evaluating ELSS funds, investors should remember that these schemes come with a mandatory three-year lock-in period. Because capital cannot be withdrawn during this time, it is vital to look beyond just the top-performing fund. Investors may want to track how these funds manage risk during market downturns and whether their current strategy aligns with their personal goals. Important monitorables include the consistency of returns across different market cycles, the fund manager's ability to maintain performance, and the expense ratios, which can impact net returns over time.