ELSS Funds saw a decline in the month of November. Earlier this year, the Securities and Exchange Board of India (SEBI) also allowed mutual funds to launch passively managed Equity-linked savings scheme (ELSS). ELSS is the tax-saving instrument for a lot of investors.

In an interaction with CNBC-TV18, Vineet Nanda, Managing Director of SIFT Capital said that the decline was probably driven by a bit of profit-taking, which happened after a short rally in November.

He added, "My view is that as we get into the January to March quarter, which typically is the aggressive quarter for tax saving, these numbers would start looking at."

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Talking about the performance of ELSS funds, Nanda said, "Majority of the ELSS funds beat their benchmark when we look at long horizons because most of these are growth-oriented and actively managed funds. So if you look at let us say, even three-year data as of today, 19 out of 30 funds have beaten their benchmarks."

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(Edited by : Anushka Sharma)