Mutual Fund investment: Did your ELSS Fund beat the market in May 2026? Check top performers

Equity Linked Savings Schemes (ELSS), the tax-saving mutual fund category under Section 80C, delivered a mixed performance in May 2026, with a handful of funds generating strong positive returns while several others remained under pressure amid market volatility.

According to FinAlpha's ELSS Funds Snapshot for the period between April 30 and May 31, 2026 (NAV as of May 29, 2026), the Quant ELSS Tax Saver Fund emerged as the best-performing ELSS fund for the month, posting a return of 4.70%, significantly outperforming both peers and the Nifty 500 TRI, which was nearly flat at -0.01% during the period.

Quant ELSS Fund leads

Quant ELSS Tax Saver Fund topped the category with a monthly gain of 4.70%. The fund also maintained strong longer-term performance, delivering:

8.77% return over three months
5.11% return over six months
12.65% return over one year
19.45% annualized return over three years
20.01% since-inception CAGR

₹1 lakh invested in Quant ELSS Tax Saver Fund at the start of May 2026 would have grown to approximately ₹1.047 lakh by month-end. The fund's strong performance highlights its ability to capitalize on market opportunities despite recent volatility.

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Other top performers

Several ELSS funds generated positive returns in May, although gains were more modest compared with Quant ELSS.

The top five performers for the month were:

Fund    Monthly Return
Quant ELSS Tax Saver Fund    4.70%
Samco ELSS Tax Saver Fund    2.35%
JM ELSS Tax Saver Fund    1.62%
HSBC ELSS Tax Saver Fund    1.61%
Mirae Asset ELSS Tax Saver Fund    0.81%

Notably, most ELSS funds recorded returns within a narrow range, indicating a broadly subdued market environment.

Most funds struggle

While some funds posted gains, many ELSS schemes ended May in negative territory. Among the weakest performers were:

Fund    Monthly Return
Sundaram ELSS Tax Saver Fund    -2.09%
Mahindra Manulife ELSS Tax Saver Fund    -1.99%
ICICI Prudential ELSS Tax Saver Fund    -1.77%
Parag Parikh ELSS Tax Saver Fund    -1.59%
ITI ELSS Tax Saver Fund    -1.58%

Large and well-established ELSS funds such as HDFC ELSS Tax Saver, Axis ELSS Tax Saver, DSP ELSS Tax Saver, SBI ELSS Tax Saver and UTI ELSS Tax Saver also delivered negative monthly returns.

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Long-term winners

Interestingly, the best monthly performers were not necessarily the strongest long-term performers.

Parag Parikh ELSS Tax Saver Fund recorded one of the highest since-inception CAGR figures at 18.19%, despite a monthly decline of 1.59%.

Similarly, Mirae Asset ELSS Tax Saver Fund delivered an impressive 17.81% since-inception CAGR, while Motilal Oswal ELSS Tax Saver Fund stood out with:

11.02% return over three months
23.93% annualized return over three years
17.33% since-inception CAGR

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Benchmark comparison

The Nifty 500 TRI, widely considered a broad-market benchmark, remained almost unchanged during May with a return of -0.01%.

Several funds managed to outperform the benchmark, but many failed to generate meaningful alpha during the month, reflecting the uneven market conditions.

Key takeaway

The May 2026 performance data underscores an important lesson for ELSS investors: short-term returns can vary significantly, but fund selection should be based on consistent long-term performance, portfolio quality, fund management style and risk-adjusted returns rather than one month's results.

For investors seeking tax benefits under Section 80C along with long-term wealth creation, ELSS funds continue to remain one of the most efficient equity-oriented investment options, despite periodic fluctuations in monthly performance.

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