Kotak ELSS Tax Saver Fund-Payout of Income Distribution cum capital withdrawal option

Kotak ELSS Tax Saver Fund-Payout of Income Distribution cum capital withdrawal option holds up reasonably well within the ELSS category, currently carrying a 3-star rating. It has delivered steady, if unspectacular, returns over a full market cycle. TopFund's composite Health Score, which weighs rating, 3-year CAGR, expense ratio and fund size, puts it at 74/100.

Cost: At 0.8378%, the expense ratio is meaningfully cheaper — about 18% below the ELSS category average of 1.02% (based on 170 comparable funds). Lower costs compound in your favour over long holding periods.

Risk-adjusted performance: Over the trailing 1-year period, the fund shows a negative Sharpe ratio of -0.33 — over the past year, returns haven't kept pace with the volatility involved, even before accounting for the risk-free rate. Separately, annualised volatility of 14.35% is fairly typical for actively managed equity funds.

Who should invest: This fund is best suited to investors looking to claim the ₹1.5 lakh Section 80C tax deduction, who are comfortable with the mandatory 3-year lock-in. The High risk rating means near-term volatility should be expected — this isn't a fund to check daily.