A Study on Performance Evaluation of Equity Linked Saving Schemes (ELSS) of Mutual Funds

NMIMS JOURNAL OF ECONOMICS AND PUBLIC POLICY Volume V • Issue 1 • January 2020

21 Pages Posted: 1 Mar 2020

See all articles by CMA(Dr.) Ashok Panigrahi

CMA(Dr.) Ashok Panigrahi

NMIMS University

Mohit Mistry

Narsee Monjee Institute of Management Studies (NMIMS), Mukesh Patel School of Technology Management & Engineering

Raghav Shukla

Narsee Monjee Institute of Management Studies (NMIMS), Mukesh Patel School of Technology Management & Engineering

Abhishek Gupta

Narsee Monjee Institute of Management Studies (NMIMS), Mukesh Patel School of Technology Management & Engineering

Date Written: January 20, 2020

Abstract

A mutual fund is a company that pools money from a group of investors and invests the money in different types of securities such as stocks, bonds, debt, etc. A mutual fund is one of the fastest-growing sectors in India and it plays a significant role in the Indian capital market. The equity-linked saving scheme is an open-ended equity diversified fund, which provides a tax benefit to investors under section 80 C of the Income Tax Act, 1961. Rs.1.5 lakh “income” gets tax benefit of up to Rs.45,000 at 30% tax without considering surcharge. However, with a large number of ELSS funds available, investors face the challenge of selecting suitable ELSS funds to suit their needs. This research paper is an attempt to evaluate the performance of the top five ELSS schemes of different mutual funds in India using various tools like Beta, Sharpe ratio, Jensen ratio, etc. It also suggests suitable ELSS schemes for investors so that they can achieve their investment objectives. The analysis reveals that the majority of funds have outperformed under Treynor's Ratio and Sharpe Ratio, giving constant and appreciable results during the course.

Keywords: ELSS Mutual Funds, Average Return, Coefficient of Determination (R2), Standard Deviation, Beta, The Sharpe Ratio, Treynor's Performance Index

JEL Classification: G01, G21, G23

Suggested Citation

Panigrahi, Ashok and Mistry, Mohit and Shukla, Raghav and Gupta, Abhishek, A Study on Performance Evaluation of Equity Linked Saving Schemes (ELSS) of Mutual Funds (January 20, 2020). NMIMS JOURNAL OF ECONOMICS AND PUBLIC POLICY Volume V • Issue 1 • January 2020. Available at SSRN: https://ssrn.com/abstract=3522299

Ashok Panigrahi (Contact Author)

NMIMS University ( email )

V. L. Mehta Road
Vile Parle (W)
Mumbai, Maharashtra 400056
India

Mohit Mistry

Narsee Monjee Institute of Management Studies (NMIMS), Mukesh Patel School of Technology Management & Engineering ( email )

India

Raghav Shukla

Narsee Monjee Institute of Management Studies (NMIMS), Mukesh Patel School of Technology Management & Engineering ( email )

India

Abhishek Gupta

Narsee Monjee Institute of Management Studies (NMIMS), Mukesh Patel School of Technology Management & Engineering ( email )

India

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