Axis Long Term Equity Fund is a popular scheme in the Mutual funds category, and has grown significantly larger than its peers. This popularity is of course with good reason as the Axis ELSS scheme has outperformed its benchmark as well as most of its peers over the long term.
1. Key Details of Axis Long Term Equity Fund
The following are some of the key details about the Axis ELSS Fund as of March 2019:
- Inception – December 2009
- AUM – Rs. 17,425 crore
- Fund Manager – Jinesh Gopani
- Benchmark – S&P BSE 200 TRI
- Expense Ratio – 0.87% (Direct Plan)
- Minimum Investment Requirement – Rs. 500
2. Axis Long Term Equity Fund Performance vs. Benchmark
|Fund Name||1-Year||3-Year||5 Year|
|Axis Long Term Equity Fund||8.53%||14.46%||17.95%|
*All Data as on March 31, 2019
The Axis Long Term Equity Fund has posted 1-year, 3-year and 5-year returns of 8.53%, 14.46%, and 17.95% respectively as of March 2019. For the same period, the scheme’s benchmark (S&P BSE 200) posted returns of -0.98%, 10.67%, and 13.76% respectively.
This shows that the Axis ELSS scheme has performed exceptionally in the long term by posting 5-year returns that were significantly higher than its benchmark. This even in light of the relatively lackluster performance of the fund in the short term due to the market correction observed in 2018. However, this can be an opportunity to purchase units of this high-quality scheme at potentially cheaper valuations.
3. Asset Allocation of Axis Long Term Equity Fund
*All Data as of March 31, 2019
This scheme is designated as a multi-cap ELSS fund, however, the Axis Long Term Equity Fund has a significant large-cap bias. As of March 2019, large-cap equity investments accounted for 68% portfolio with investments in mid-cap and small-cap companies accounting for an additional 24% and 2% of scheme assets respectively.
The mid and small-cap investments can potentially help the scheme post significant outperformance during periods of market bull runs. On the other hand, this ELSS fund’s large-cap bias can potentially help the scheme contain losses in case of future market corrections.
While these allocations by themselves seem similar to that of its peers, the focus of this scheme on making high-quality investments even in the mid and small-cap space has allowed it to post significant gains in the long term and contain losses in the short term.
The ELSS fund from Axis Mutual Fund currently does not feature any significant cash/cash equivalent/short term debt investments, which is in line with the category average. However, considering the size of the fund, we expect some allocation to debt and related instruments.
4. Axis Tax Saver Fund Sector-wise Investments Breakdown
* All Data as on March 31, 2019
As of March 2019, Axis Long Term Equity Fund has allocated significant assets to the financial sector which accounts for around 41% of the scheme’s total investments. Apart from this, the scheme has substantial investments in other consumption-driven sectors too such as automotive, services and consumer durables which accounted for around 11%, 8%, and 6% of the scheme’s assets respectively.
The scheme is also invested in traditionally defensive sectors such as technology and chemical which together account for around 16% of the portfolio of the Axis Tax Saver Fund as of October 2018. Therefore, while the fund manager is betting heavily on domestic consumption picking up, he is also hedging his bets through investments in comparatively defensive sectors.
The focus of investments for this scheme has been on selecting quality stocks which is evident from the top individual holdings of this scheme as shown below.
5. Top Individual Holdings of Axis Long Term Equity Fund
*Data as of March 31, 2019
6. Key Statistics about Axis Long Term Equity Fund*
*Data Source – Pulse Labs. All data as of March 2019
7. Investment Facts about Axis Long Term Equity Fund (ELSS)
The following are some of the key facts that you need to keep in mind when investing in the Axis ELSS fund:
- The investment focus is on sectors that grow as domestic consumption picks up
- Secondary focus on hedging consumption bets through potentially defensive sectoral investments
- Substantial large-cap allocation to contain overall portfolio volatility
- Mid and small-cap investments to provide robust growth during market bull runs
- Proven long-term performance track record
- Large AUM (significantly larger than its category peers)
If you are looking for a high-quality ELSS investment, Axis Long Term Equity Fund fits the bill, more so if you plan to stay invested for a long term. While it is notable that this multi-cap ELSS fund has not been tested during the severe meltdown resulting from the 2008 sub-prime crisis, the scheme has proved time and again that it can hold its own versus its peers in a variety of market conditions.
Considering you have a tolerance for moderate or high-risk investments and are seeking a quality tax saver mutual fund that can potentially provide significantly high long-term returns, it is a good choice.
8. Axis Long Term Equity Fund (ELSS) Tax Benefits
Axis Tax Saver Fund is an equity linked savings scheme (ELSS) which offers investors the opportunity to save tax of up to Rs. 1.5 lakh annually while simultaneously growing their wealth. As an 80C investment, this scheme does have a short lock-in period of 3 years, during which unit redemption or switch out cannot be performed. The applicable tax on long-term gains from the scheme is also low at 10% which is applicable only if long-term capital gains from equities exceeds Rs. 1 lakh during a financial year. Read more about the taxation of mutual funds.
9. Best Tax Saver Mutual Fund Schemes
|Best ELSS Funds for Tax Saving|
|Aditya Birla Sun Life Tax Relief 96|
|Motilal Oswal Long Term Equity Fund|
|Axis Long Term Equity Fund|
|SBI Magnum Tax Gain|
|Reliance Tax Saver Fund|