SBI vs Quant ELSS: Which Best Tax Saving Fund to Add in Your Portfolio for 2025?

This approach provides ample time to assess market conditions, adjust portfolios, and avoid rushed decisions at the year-end, when investors often face time constraints and heightened emotional decision-making. By spreading investments throughout the year, individuals can take advantage of market fluctuations and benefit from rupee-cost averaging, reducing the risk of making investments during market highs or lows.

In the current climate of market volatility, this disciplined approach becomes even more essential. Geopolitical tensions, inflationary pressures, and global economic uncertainties have led to increased market fluctuations, making it challenging to time investments effectively.

[Read: 4 Best Tax Saving Mutual Funds for 2025 - Top ELSS Funds in India]

An early tax-saving plan provides investors with the flexibility to make adjustments as needed, aligning their portfolios with long-term financial goals while navigating short-term market fluctuations. By making informed decisions from the outset, investors are better positioned to weather volatility, ensuring their tax-saving strategies remain effective despite changing market conditions.

Note:  In my previous ELSS/tax-saving mutual fund comparison reports, I have covered a comprehensive analysis of the Best ELSS Mutual Funds; you may consider reading -

Pick the Best Tax Saving Mutual Funds: BOI vs JM ELSS Tax Saver Fund

Parag Parikh ELSS Tax Saver Fund vs Kotak ELSS Tax Saver Fund: Pick Your Tax-Saving Option

Best ELSS Mutual Funds: DSP ELSS Tax Saver Fund vs Nippon India ELSS Tax Saver Fund

Bandhan vs Motilal Oswal ELSS Tax Saver Fund: Which ELSS Suits Your Portfolio?

This article provides an in-depth comparative analysis of two best ELSS mutual funds in India: Quant ELSS Tax Saver Fund and SBI Long Term Equity Fund.

# - Quant ELSS Tax Saver Fund

Quant ELSS Tax Saver Fund, an open-ended equity scheme, is a well-established tax-saving option launched in April 2000, with an AUM of Rs 10,512.81 crore as of December 31, 2024. It aims to generate long-term capital growth through a diversified portfolio of equity and equity-related securities across all market capitalisations, employing a flexible investment approach that spans large-cap, mid-cap, and small-cap companies.

# - SBI Long Term Equity Fund

SBI Long Term Equity Fund, an open-ended equity scheme from SBI Mutual Fund, is a popular tax-saving option launched in March 1993, with an AUM of Rs 27,791.08 crore. It adopts a balanced approach, diversifying across sectors and market capitalisations to reduce concentration risks and enhance resilience during market fluctuations. With a mandatory 3-year lock-in period, the fund is well-suited for long-term investors.

• Investment Style and Philosophy:

  Quant ELSS Tax Saver Fund: adopts a flexible asset allocation strategy, aligning with market conditions while targeting high-growth companies across market capitalisations, with a focus on undervalued opportunities. Using quantitative techniques to manage risk and optimise returns suits investors seeking aggressive growth in tax-saving investments.

  SBI Long Term Equity Fund: employs a bottom-up stock-picking strategy, focusing on fundamentally strong companies with growth potential across sectors and market caps. Adhering to a growth-oriented philosophy, it balances risk and returns to achieve steady capital compounding, making it ideal for investors seeking both stability and growth in their tax-saving portfolios.

• Performance Comparison: Scheme Returns

  Scheme Name	Absolute (%)	CAGR (%)
  	1 Year	3 Years	5 Years	7 Years	10 Years
  Quant ELSS Tax Saver Fund	47.96	27.31	34.83	25.21	25.12
  SBI Long Term Equity Fund	52.60	27.06	24.83	18.03	17.03
  ELSS - Category Average	35.47	19.40	20.64	15.86	16.37
  Benchmark - Nifty 500 TRI	34.74	18.13	19.62	15.72	15.21

  Data as of January 16, 2025
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  Both the Quant ELSS Tax Saver Fund and SBI Long Term Equity Fund have showcased impressive market performance, consistently surpassing the ELSS category average and their benchmark index, Nifty 500 TRI, across multiple time horizons.

  Over three years, Quant ELSS delivered a CAGR of 27.31%, closely followed by SBI at 27.06%, reflecting their ability to capitalise on growth opportunities through skilled fund management and robust stock selection. Quant further outshines over the long term, with a 5-year CAGR of 34.83% and a 7-year CAGR of 25.21%, compared to SBI's respective 24.83% and 18.03%. These figures highlight Quant's strong compounding growth and strategic stock-picking approach, making it a top performer in the ELSS category.

  While both funds have commendable track records, Quant ELSS stands out as an attractive option for investors seeking superior long-term capital appreciation. In contrast, SBI Long Term Equity Fund, with its moderate but steady returns, may appeal to conservative investors with a lower risk appetite.

• Portfolio Composition: Asset Allocation of Schemes

  Scheme Name	Large Cap %	Mid Cap %	Small Cap %
  Quant ELSS Tax Saver Fund	80.94	7.22	6.15
  SBI Long Term Equity Fund	59.27	20.21	10.79

  Data as of December 31, 2024
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  Quant ELSS Tax Saver Fund has a significant allocation to large-cap stocks, with 80.94% of its portfolio invested in this segment. This indicates a preference for stability and lower risk, as large-cap stocks are typically well-established companies with strong market positions. The fund allocates a smaller proportion to mid-cap (7.22%) and small-cap stocks (6.15%), suggesting a more conservative approach to equity diversification.

  In contrast, SBI Long Term Equity Fund exhibits a more balanced allocation strategy. While it invests 59.27% in large-cap stocks, its allocation to mid-cap (20.21%) and small-cap stocks (10.79%) is considerably higher. This indicates a focus on capturing growth opportunities from mid and small-cap segments, which could potentially deliver higher returns, albeit with increased risk. This diversified approach makes it more suited to investors with a moderate risk appetite seeking long-term capital growth.

• Market volatility: Risk Profile of Schemes

  Risk Ratio	Quant ELSS Tax Saver Fund	SBI Long Term Equity Fund
  Standard Deviation (3 Year)	18.73	14.49
  Sharpe	0.19	0.35
  Sortino	0.37	0.73

  Data as of December 31, 2024
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  Quant ELSS Tax Saver Fund has a higher Standard Deviation of 18.73, indicating greater volatility and risk compared to the SBI Long Term Equity Fund, which has a lower Standard Deviation of 14.49. This makes the Quant ELSS suitable for investors with a higher risk appetite, offering the potential for larger fluctuations in returns.

  Additionally, the SBI ELSS holds a higher Sharpe Ratio of 0.35 and a Sortino Ratio of 0.73, indicating better risk-adjusted returns, particularly for downside risks. In contrast, the Quant ELSS has a lower Sharpe Ratio of 0.19 and Sortino Ratio of 0.37, reflecting a less favourable risk-reward profile.

• Top Holdings of the Schemes:

  Quant ELSS Tax Saver Fund		SBI Long Term Equity Fund
  Company	% Assets	Company	% Assets
  Reliance Industries Ltd.	9.23	HDFC Bank Ltd.	7.49
  JIO Financial Services Ltd.	7.52	Reliance Industries Ltd.	3.53
  Samvardhana Motherson International Ltd.	7.44	ICICI Bank Ltd.	3.42
  Adani Power Ltd.	7.09	Bharti Airtel Ltd.	3.18
  Life Insurance Corporation of India	5.83	Torrent Power Ltd.	2.77
  Larsen & Toubro Ltd.	5.77	Mahindra & Mahindra Ltd.	2.72
  Grasim Industries Ltd.	5.51	State Bank Of India	2.67
  Aurobindo Pharma Ltd.	5.36	Tata Steel Ltd.	2.58
  ITC Ltd.	4.09	ITC Ltd.	2.51
  NTPC Ltd.	3.91	Tech Mahindra Ltd.	2.32

  Data as of December 31, 2024
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  Quant ELSS Tax Saver Fund demonstrates a concentrated portfolio strategy with significant exposure to blue-chip companies and a diverse sectoral allocation. Reliance Industries Ltd. leads the top holdings with 9.23% of the assets, followed by Jio Financial Services Ltd. and Samvardhana Motherson International Ltd. The fund also has notable allocations to Adani Power Ltd. and Life Insurance Corporation of India, reflecting a strategic mix of energy, finance, and manufacturing sectors.

  [Read: How to Select the Best Suitable Tax-saving Option for You]

  In contrast, SBI Long Term Equity Fund, adopts a relatively diversified allocation with HDFC Bank Ltd. as its top holding at 7.49%, emphasising stability in the financial sector. Along with Reliance Industries Ltd., ICICI Bank Ltd., and Bharti Airtel Ltd., highlighting a blend of banking, energy, and telecom exposure. Torrent Power Ltd. and Mahindra & Mahindra Ltd. represent the fund's commitment to energy and automotive sectors, while ITC Ltd. and Tech Mahindra Ltd. add depth through consumer goods and IT sectors.

• Expense Ratio of the Schemes

  Scheme Name	Direct Plan Expense Ratio	Regular Plan Expense Ratio
  Quant ELSS Tax Saver Fund	0.59%	1.71%
  SBI Long Term Equity Fund	0.95%	1.60%

  Data as of December 31, 2024
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  While the difference between the two funds' expense ratios is minimal under the regular plan, even a small percentage point difference can accumulate over time and impact your returns. However, under the direct plan, the Quant ELSS Tax Saver Fund offers a lower expense ratio and attracts investors, being a cost-effective option for investors.

  Remember, a lower expense ratio translates to potentially higher returns over time, but a lower Expense Ratio should not be the only factor to be considered while investing in ELSS.

  [Read: How to Select the Best ELSS for Tax-saving in 2024]

• Suitability of Investors to the Schemes:

  Quant ELSS Tax Saver Fund is suitable for investors seeking tax savings under Section 80C, with a higher risk tolerance and a focus on aggressive equity growth. In contrast, the SBI Long Term Equity Fund caters to investors looking for steady long-term returns, with a moderate to high-risk appetite and a focus on large-cap stocks for more stability. Both funds are long-term investment options, but the choice depends on whether tax saving or consistent equity exposure is the priority.

  However, investors should be prepared for short-term market fluctuations, as the fund's performance is tied to overall market conditions. Ultimately, a thorough evaluation of your risk appetite, investment horizon, and portfolio needs will guide you towards the ELSS that best aligns with your financial goals.

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MITALI DHOKE is a Research Analyst at PersonalFN. She is an MBA (Finance) and a post-graduate in commerce (M. Com). She focuses primarily on covering articles around mutual funds including NFOs, financial planning and fixed-income products. Mitali holds an overall experience of 4 years in the financial services industry.
She also actively contributes towards content creation for PersonalFN’s social media platforms in the endeavour to educate investors and enhance their financial knowledge.
 

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.