Performance evaluation of tax savings mutual funds

Equity Mutual Funds are one of the important means of pooling risk capital from small investors. In order to encourage such investment culture, the Govt. of India in the year 1992 introduced the Equity Linked Savings Scheme (ELSS) mutual funds. Investments into the scheme qualify for tax benefit. The tax benefit comes with certain regulatory provisions. These regulatory provisions make the ELSS funds distinct from Diversified Equity Funds. Tax Saving Mutual Fund is one of the financial instruments in capital market, here the study is based upon the ELSS of public sector and private sector Mutual Funds, main purpose of the study is to compare the ELSS scheme of public sector and private sector and analyse the market timing abilities of fund managers of ELSS. A mutual fund is a financial intermediary that pools the savings of small investors for collective investment in a diversified portfolio of securities. Indian mutual fund industry is playing a significant role in the development of capital market and in the growth of Indian economy. Mutual fund investment is quite popular among small investors for seeking tax incentives. Tax-saving mutual fund schemes or the equity-linked savings schemes (ELSS) offers tax deduction benefits to investors. Thus, this study is carried out to fulfill the objectives of the investors.