Union ELSS Tax Saver Fund

Union ELSS Tax Saver Fund has delivered long-term SIP XIRR of 15.26% over 10Y and 14.3% over 12Y, outperforming NIFTY 50 on all measured periods with alphas of 2.34% to 4.80%. However, it trails the category average SIP XIRR across most horizons, including 15.82% vs 15.26% over 10Y and 15.49% vs 14.53% over 3Y. Recent calendar year returns are muted, with -6.05% in 2026 and 4.69% in 2025.

The fund shows strong downside protection with downside capture of 86-91% across periods and beta below 1 (0.90-0.99), cushioning losses during market declines such as 2026 when it fell 6.05% vs the benchmark's steeper drop. Risk-adjusted returns are solid, with positive alpha in every measured period and a stable Calmar ratio around 0.39 across horizons. Six drawdown events exceeding 10% indicate periodic volatility typical of equity funds.

The 77-stock portfolio is anchored in financials, with Banks alone at 21.6% and ICICI Bank, HDFC Bank, and Axis Bank as the top three holdings totaling 15.07%. Sector diversification is reasonable, with the next sectors (Auto Components 6.8%, Pharma 5.8%, IT 5.7%, Chemicals 5.1%) well represented. Top-10 holdings are moderately sized at under 7.5% each, limiting single-stock concentration risk.

The fund consistently lags category average SIP XIRR, by roughly 0.6-0.9 percentage points across the 3Y, 7Y, 10Y, and 12Y horizons, though the gap narrows in shorter periods (9.3% vs 9.76% in 1Y). Its long-term outperformance against NIFTY 50 with consistent positive alpha demonstrates stock-selection skill even if peer-relative returns are middling. The fund's defensive capture profile differentiates it as a lower-volatility option within the ELSS category.

This fund suits tax-focused investors seeking steady long-term wealth creation with below-benchmark volatility and a 3-year lock-in aligned to ELSS rules. A horizon of 5-7 years or more is ideal to allow the historical 14-15% XIRR pattern to play out. Investors with moderate risk tolerance who prefer downside protection over aggressive upside participation will find the 87-91% capture profile appropriate.

• Consistent positive alpha of 2.34% to 4.80% against NIFTY 50 across all measured horizons from 1Y to 15Y
• Strong downside protection with downside capture of 86-91% and sub-1 beta, limiting losses in weak markets like 2026 when the fund fell only 6.05%
• Well-diversified 77-stock portfolio with no single holding above 7.42% and a balanced sector spread beyond the 21.6% banking allocation

• Trails category average SIP XIRR across nearly all horizons, including a 0.56% gap over 10Y (15.26% vs 15.82%) and 0.96% gap over 3Y (14.53% vs 15.49%)
• Expense ratio of 1.39% is relatively high for a direct plan and adds to the ongoing underperformance versus peers
• Heavy banking exposure of 21.6% creates sector concentration risk if financials face stress