Skip to main content

Axis Long Term Equity Fund for 2016

Axis Long Term Equity Fund Invest Online

 
Equity Linked Savings Scheme article in Advisorkhoj - Axis Long Term Equity Fund: A superstar among ELSS Mutual Funds
 

Equity Linked Savings Scheme (ELSS) is one of the most popular tax saving investments under section 80C of the Income Tax Act. With Equity Linked Savings Schemes, investors can avail the triple benefits of tax savings, capital appreciation and tax free returns. In the 2014 budget the overall limit under section 80C has been increased to Rs 1.5 lacs. This gives investors an opportunity of saving more tax and allocating more investment to ELSS, which in turn will help them with higher capital appreciation over the long term.

Axis Long Term Equity fund (formerly Axis Tax Saver Fund) has been a top ELSS performer in recent years. This fund launched in Dec 2009, has beaten the returns of ELSS category and generated significant alphas, every year since its inception. See the chart below, for the comparison of annualized returns over one, three, five and ten year periods, between Axis Long Term Equity fund (Growth), the ELSS Category and the benchmark S&P BSE 200 index (NAVs as on August 1).

Equity Linked Saving Schemes - Comparison of annualized returns between Axis LT Equity fund, ELSS Category and S&P BSE 200

Even in terms of annual returns the fund's performance has been outstanding, making this fund one of the most consistent performers in the ELSS category. Consistency of performance is one of the most important performance factors in mutual funds. The chart below shows the annual returns of the Axis Long Term Equity Fund (Growth) and the ELSS category, since the inception of the fund.

Equity Linked Saving Schemes - Comparison of annualized returns between Axis LT Equity fund and ELSS category

The fund has been ranked a "Very Good" performer (Rank 1) by CRISIL for several successive quarters. Morningstar has assigned a 5 star rating for this fund.

Fund Overview

This fund is suitable for investors looking for tax planning investment options under 80C with the expectation of long term capital appreciation. However, since this is essentially a diversified equity fund, it is subject to market risk and volatility as compared to other tax saving instruments like PPF, NSC etc. However, equities as an asset class generate superior returns over the long term and serves as an effective hedge against inflation. As such, the fund is suitable for investors planning for long term financial objectives like retirement planning, children's education, marriage etc. The fund has an AUM base of over Rs 1,300 crores, with an expense ratio of 2.74%. While the expense ratio is slightly on the higher side, the funds excellent performance has more than made up for it. The fund manager of this scheme is Jinesh Gopani since 2011. The current NAV (as on Aug 1 2014) is 23.5 for the growth plan and 18.7 for the dividend plan.

Portfolio Construction

Though the fund portfolio has a large cap bias, the fund manager has a flexible approach towards market capitalization and sector allocations. The fund manager identifies stocks and sectors with attractive valuations. About 45% of the portfolio holding is in small and midcap stocks. From a sector perspective, the portfolio has a bias for cyclical sectors like BFSI, Engineering, Automobiles and Auto Ancillaries, but it also has substantial allocations to defensive sectors like IT and Pharmaceuticals. This portfolio construction enables the fund manager to get good returns across different market conditions. In terms of company concentration, the portfolio is very well diversified with its top 5 holdings, HDFC Bank, L&T, Kotak Mahindra Bank, TCS and HDFC Industries accounting for only 32% of the total portfolio value. The top 10 stocks account for little over 50% of the portfolio holdings.

Equity Linked Saving Schemes - Sector Composition and Top 5 Holdings of Axis Long Term Equity Fund

Performance comparison with Peer Set

A comparison of annualized returns of Axis Long Term Equity Fund versus its peer set over various time periods shows why this fund is considered a chart topper among ELSS funds. In terms of trailing annualized returns, the fund has beaten all its peers across most time periods. See chart below for comparison of annualized returns over one, two and three year periods. NAVs as on August 1 2014.

Equity Linked Saving Schemes - Comparison of annualized returns over one, two and three year periods

Risk & Return

Even though the Axis Long Term Equity Fund has outperformed the ELSS category in terms of returns, from a risk perspective, the volatility of the fund is lower than that of the ELSS category. The annualized standard deviation of monthly returns of Axis Long Term Equity Fund over the last three years is 16.5% compared to 18% for the ELSS category. It is no surprise that on a risk adjusted return basis, as measured by Sharpe Ratio the fund has outperformed the ELSS category. See charts below for comparison of volatilities and Sharpe ratios between Axis Long Term Equity Fund and ELSS funds category.

Equity Linked Saving Schemes - Volatility Comparison and Sharp Ratio Comparison - Axis Long Term Equity Fund vs. ELSS Category

Rs 1 lac lump sum investment in the Axis Long Term Equity fund NFO (growth option) would have grown to value of nearly Rs 2.4 lacs as on Aug 1 2014. The chart below shows the growth of Rs 1 lac investment in the Axis Long Term Equity fund (growth option).

Equity Linked Saving Schemes - Growth of Rs 1 lac lump sum investment since inception in the Axis Long Term Equity fund (growth option)

The chart below shows the returns since inception of Rs. 3000 invested monthly through Systematic Investment plan (SIP) route in the Axis Long Term Equity fund (growth option). The SIP date has been assumed to first working day of the month. The chart below shows the SIP returns of the fund based on NAV as on Aug 1 2014.

Equity Linked Saving Schemes - SIP returns since inception of Axis Long Term Equity fund (growth option)

The chart above shows that a monthly SIP of Rs. 3000 started at inception of the Axis Long Term Equity fund (growth option) would have grown to over Rs 3 lacs by August 1 2014, while the investor would have invested in total less than Rs 1.7 lacs. The SIP return (as measured by XIRR) since inception of the fund is nearly 25%. Surely, no other tax saving investments gave such returns in the last three or four years.

Conclusion

Axis Long Term Equity fund has established itself as one the best ELSS funds in the last few years. It has outperformed its peers and the benchmark during both bull and bear market cycles. Investors planning for tax saving investments can consider investing the scheme through the systematic investment plan (SIP) or lump sum route with a long time horizon. Investors should also ensure that the investment objectives of the fund are aligned with their individual risk profiles and time horizons. They should consult with theiPrajna Capital if Axis Long Term Equity fund is suitable for their investment portfolio.

 
-----------------------------------------------
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saving Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

-----------------------------------------------

 

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

LIC Leave Encashment Plan

LIC Leave Encashment Plan       Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms fro

Power of Compounding in Investments

Power of Compounding in Investments Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich Top 10 Tax Saver Mutual Funds for 2017 - 2018 Best 10 ELSS Mutual Funds to Invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Tata India Tax Savings Fund  3. Birla Sun Life Tax Relief 96 4. ICICI Prudential Long Term Equity Fund 5. Invesco India Tax Plan 6. Franklin India TaxShield  7. Reliance Tax Saver (ELSS) Fund 8. BNP Paribas Long Term Equity Fund 9. Axis Tax Saver Fund 10. Sundaram Diversified Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com OR Call us on 94 8300 8300

MF SIP Top Up Online

Mutual Fund SIP Top Up Online As your monthly income grows, so should your savings. With this facility, you can increase your existing monthly SIP contributions. This can be done on a half-yearly and yearly basis. And you can top up with a minimum of Rs.500 per installment or multiples of Rs.500 as per your convenience.

Kotak Banking Exchange Traded Fund (ETF)

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Kotak Banking Exchange Traded Fund (ETF) Kotak Mahindra Mutual Fund has launched Kotak Banking Exchange Traded Fund ( ETF ). The fund aims to provide returns before expenses that closely correspond to the total returns of stocks belonging to the CNX Bank Index , subject to tracking error. For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now