Use rolling returns to select consistent tax-saving funds

The funds included have beaten their benchmarks 90% of the time or more

They can help you remove the biases induced by the use of point-to-point returns

• Point-to-point returns, widely used to judge a fund’s performance, convey the picture only at a given point of time 

• If the fund has not done well at certain points in the past, that is not captured

• Use rolling returns to overcome this bias 

• We calculated the three-year return at monthly periodicity over a five-year period for all equity-linked savings schemes (ELSS)

• Of the 60 data points (less in case of funds started later), we checked what percentage of times they were ahead of their benchmarks

• The funds included have beaten their benchmarks 90 per cent of the time or more

• Average returns given are average of three-year returns over 60 periods (months)

• If you are looking at consistent performers, this sample is a good starting point for selecting ELSS funds

Note: Funds are growth options of regular funds, except Quantum, whose direct fund has been used; * Percentage of times the fund outperformed its benchmark; Source: Ace MF; Data as on April 27, 2017