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Title: A comparative performance assessment of ELSS funds in India

Background: A mutual fund is a company that brings together money from many people and
invests it in stocks, bond or other assets. The combined holdings of stocks, bonds or other assets
the funds own are known as its portfolio. Each investor in the fund owns shares, which represent
a part of these holdings.
Mutual fund industry in India is just four decades old in India. During this short span of time
it has made tremendous growth. It was started by UTI in the year 1964 with few handful
schemes for small investors. Now days it has become a major source of investment for large
number of investors. Moreover mutual funds have added new dimensions in fund raising
capacity of corporate sectors.

ELSS is a type of diversified equity mutual fund which provides an income tax incentive to the
investor for the investment made. The incentive currently is in the form of a deduction from
income, U/s 80 C of the Income Tax Act, up to an amount of Rs 150000, towards the investment
made during the financial year . ELSS mutual funds as they provide a tax deduction, are subject
to certain regulatory restrictions, which make them distinct from the regular diversified equity
mutual funds.

In order to encourage individual investors to develop equity investment culture, the then
finance minister Shri. S.B.Chavan, in his budget speech on 28th February 1989, introduced
a new mutual fund scheme called the ‘Equity Linked Savings Scheme’ (ELSS).The ELSS
funds incentivized the small investors with a lower income tax obligation, depending on
the amount invested in ELSS funds, during the year. ELSS mutual funds therefore are
conceived to be one of the means of reducing the income tax burden of the investor and so
appropriately, referred to as Tax Saving Mutual Funds.

A mutual fund's performance is always expressed in terms of its total return, which is the sum of
the change in a fund's net asset value (NAV), its dividends and its capital gains distributions over
a given period of time.

Generally, the time periods used by investment research analysts are year-to-date, one year, three
years, five years and 10 years. Of most relevance to investors are the five and 10-year periods,
with the latter time frame being considered the best measure of an investment manager's ability
to perform.

Basically it is important to know the fund performance because the past performance can give
insight whether it performed consistently over extended period or not. After all, only consistent
funds will be able to minimize the losses during bad market conditions.

Research Question:

1. How do the ELSS fund are different in performance?

2. What are the differences in performances of the constituent stocks pertaining to a
performing and non performing ElSS fund?

Research Objective:

1. To study the performance criteria for assessing the mutual funds.

2. To compare the ELSS fund under studying on the basis of performance criteria.
3. To investigate the performance of the stock constituting the mutual fund.
4. To delve into the interrelationship between stock performance and mutual fund

Proposed Methodology:

Sample: Open-ended direct ELSS funds

Data Source:, Meta stock, CMIE prowess

Method: Appropriate statistical and multicriteria decision analysis technique shall be applied.
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