Axis long term equity fund is a shining star among equity diversified funds of India. It is an equity linked saving scheme i.e. tax saving mutual fund. This mutual fund scheme gives you best return as well as the tax benefit.
In this article, I will tell you about the objective of Axis Long Term Equity Fund. Its performance and peer comparison. You will also learn about the management, history and portfolio of Axis long term equity fund.
- 1 Objective of Axis long Term Equity Fund
- 2 Strategy of Axis Long Term Equity Fund
- 3 Portfolio of Axis Long Term Equity Fund
- 4 Performance Of Axis Long Term Equity Fund Growth
- 5 Peer Comparison of Axis Long Term Equity Fund Growth
- 6 Risk
- 7 Management
- 8 Expenses of Axis Long Term Equity Fund
- 9 Terms for investment in Axis Long Term Equity Fund
- 10 Variation of Axis Long Term Equity Fund
Objective of Axis long Term Equity Fund
We know that axis long term equity fund is a diversified equity fund. An equity fund should give a high return in the long term. Let us see what the scheme say about its objective.
The investment objective of the Scheme is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related Securities.
- It means that Axis Long Term Equity Fund Invest mostly in the share market.
- It will not focus on any particular sector, rather It can pick shares from any sector.
- It will not try for short term profit, rather it works for long term profit.
- It will also give enough weightage to dividend paying shares for regular income.
Strategy of Axis Long Term Equity Fund
To achieve its objective of long term profit, the Axis Mutual fund has devised following strategy for the Axis long term equity fund.
- It will invest primarily in large cap stocks. At least 50% of the portfolio will be of large cap shares. The top 100 listed companies of India are considered as the large cap. The investment in large cap shares can go up to 100%.
- The investment in midcap companies can go up to 50% of the portfolio. Midcap companies are those companies which are from rank 101 to rank 400. CNX 500 is considered for this ranking.
- The Fund invests in quality businesses. The business which can sustain for decades.
- The fund invests through bottom-up stock picking. It means the fund picks individual shares irrespective of their sectors.
This approach focuses on the analysis of individual stocks. In bottom–up investing, therefore, the investor focuses his or her attention on a specific company rather than on the industry in which that company operates or on the economy as a whole. – Investopedia.com
4 Stock Picking Mantras of Axis Long Term Equity Fund
- Sound management pedigree with a track record to manage business in all economic cycles
- High sustainable growth & superior return metrics
- Superior and scalable business model
- Avoid highly cyclical and highly regulated sectors
As stated the fund can tweak its objective as well as the strategy according to the needs. Currently, Axis long term equity fund is working on the following strategy.
- The fund is selecting those stocks which have long term earning prospects and quality businesses.
- The stock should give a higher return in the medium and long term.
- Private sector banks, autos, auto ancillary, housing & consumption sector are the preferred sector of Axis Long Term Equity Fund.
- The fund also includes bottom-up stock selection ideas in Pharma, IT and defence sectors.
- The Fund is not much concerned about the short-term volatility.
Portfolio of Axis Long Term Equity Fund
The portfolio of Axis long term equity fund primarily consist the finance and auto companies. Finance and auto companies grow with the economy. Hence, you can expect better performance if the economy grows.
HDFC bank and Kotak Mahindra Bank are two of the biggest shares in its portfolio. The fund has also invested in TCS and Tech Mahindra. Among Midcap companies Pidilite and TTK prestige has taken greater weightage.
To know more about the latest detailed portfolio of Axis Long Term Equity Fund, you can visit the Axis MF website.
Performance Of Axis Long Term Equity Fund Growth
This fund has performed extraordinarily well. It has been way ahead to the benchmark index BSE 200. Since inception, it has given 22% annual return. This return is very good, considering the CNX Nifty and BSE 200 has given only 9% return.
Recommended: ELSS Mutual Fund Schemes Return Calculator
The performance of Axis Long Term Equity Fund is not a flash in the pan. Rather, every year, it has beaten the benchmark index with significant margin. Actually, it has been a dream run for the fund.
|June 30, 2012 To June 30, 2013||June 30, 2013 To June 30, 2014||June 30, 2014 To June 30, 2015||Since Inception (29 Dec, 2009)|
|Absolute (%)||Absolute (%)||Absolute (%)||Annualised (%)|
|Axis Long Term Equity Fund Growth||15.88||54.91||33.43||22.60|
|S&P BSE 200||8.69||34.45||12.01||9.03|
Since the inception, Axis long term remained an outperformer. Out of 18 quarters, it has beaten the benchmark index in 14 quarters. The consistent performance of Axis long term has put it on the top.
|Axis L/T Equity Fund||ELSS Category|
Peer Comparison of Axis Long Term Equity Fund Growth
As you have seen above, the ‘Axis long term Equity fund Growth’ has been a consistent outperformer. Often, it has beaten the category average. Let us assess the performance of Axis long term among its competitors. I am comparing the Axis long term equity fund only with those peers which have outperformed the category average in 1, 3 and 5 year period.
You can see Axis long term equity fund is far ahead with its nearest competitor in 3 year and 5 year period. However, during last one year Birla Sun Life Tax Relief 96 has a slight edge over the Axis long term equity fund.
|1 year||3 year||5 year|
|Name||Annulised (%)||Annulised (%)||Annulised (%)|
|Axis Long Term Equity Growth||18.36||28.91||18.77|
|Birla Sun Life Tax Relief 96 Growth||19.38||23.98||10.38|
|Religare Invesco Tax Plan Growth||13.17||23.78||13.04|
|BNP Paribas Long Term Equity Fund Growth||13.95||23.32||13.86|
|Birla Sun Life Tax Plan Growth||18.17||23.02||12.65|
|Franklin India Taxshield Fund Growth||16.31||22.66||13.73|
|IDFC Tax Advantage (ELSS) Fund – Regular Plan – Growth||11.73||22.05||11.91|
|Edelweiss ELSS Growth||15.9||20.67||11.08|
The axis long term equity fund can be compared on the basis of risk, star rating and SIP return. You can read my detailed post on the peer comparison of Axis long term equity fund.
The measurement of risk in a mutual fund is a little bit technical. A fund is riskier if it swings more than the benchmark index. If nifty falls 5% and the fund falls 10%, the fund is riskier.
The swing of a fund in comparison to market is measured in the terms of standard deviation and Beta. Greater standard deviation means riskier fund. If Beta of a fund is more than 1, it means the fund is riskier than the market.
Despite high performance, Axis long term equity fund is less risky. The standard deviation of Axis Long Term Equity Fund is less than the benchmark index. The beta was also less than 1 during last 3 years.
|Standard Deviation of benchmark||14.7%|
Among the top 10 ELSS, the Axis Long Term Equity Fund is least risky. LESS RISK MORE GAIN.
Must Read: Top 5 ELSS On The Basis Of Risk
Axis Long Term Equity Fund is managed by the Jinesh Gopani. Jinesh is an old hand of the Axis mutual fund. He is managing the Axis Long Term Equity Fund since April 2011. At that time, the fund was only 1 year and 3 months old. Jinesh was associated with Axis mutual fund since October 2009. Earlier to this, he was with Birla sun life. Jinesh had done masters in management studies from Bharti Vidyapeeth.
Jinesh has nurtured this fund. Within 2 years of his management, the Axis long term equity fund started to shine. Under his management, the year 2013 and 2014 were quite good for the Fund.
Jinesh also manages the Axis income saver fund. Mr. Kedar Karnik is the associate fund manager of this fund.
Expenses of Axis Long Term Equity Fund
This ELSS does not charge any entry or exit load. But there is an annual expense. These are the fees and expenses for operating the scheme. These expenses include Investment Management and Advisory Fee charged by the AMC, Registrar and Transfer Agents‟ fee, marketing and selling costs etc.
The Axis Long Term Equity Fund takes 2.5% of asset under management every year as fund management fees. The 2.5% of AUM is calculated from the daily average balance of the asset.
Along with this 2.5% fund management charge, the Fund can also charge extra 0.3 from the investor of small cities.
The annual recurring fees of 2.5% decreases with the rise in asset under management. It declines up to 1.75% if AUM crosses 300 crores. However, Axis Long Term Equity Fund charges up to 2.49% of AUM as the fees and charges.
There is a direct plan of the Axis Long Term Equity Fund which has charges less than 1%. To invest in a direct plan, you have to directly go to the Axis mutual fund branch or axis mutual fund website. You can also invest into direct plan online.
Terms for investment in Axis Long Term Equity Fund
- The minimum investment should be of Rs 500.
- The money gets locked for 3 years.
- Every successive SIP installment is locked for 3 years individually.
Variation of Axis Long Term Equity Fund
There are 4 separate plans.
1. Axis Long Term Equity Fund Regular Growth
Axis Long Term Equity Fund regular growth is a regular plan. It charges high fund management fees. It does not give you any money before the redemption. You get the benefit of compounding.
2. Axis Long Term Equity Fund regular Dividend
It is also a regular dividend paying plan. It takes high fund management charge. It returns back some profit before the maturity. The mutual fund company declares the dividend according to profit scheme would have earned. There is no such certainty about the dividend.
3. Axis Long Term Equity Fund direct growth
It is a direct plan. It charges low fund management fees. To subscribe this plan, you need to approach the fund office or online portal. This plan has slightly higher NAV than Axis Long Term Equity Fund regular growth.
4. Axis Long Term Equity Fund Direct dividend
This plan is also a direct plan. It charges little fund management fees. It gives a regular dividend. Dividends are not locked for 3 years. Dividend plan is not best for wealth creation.
Must Read: Best ELSS to Invest in 2016
In this post, I have told you about the features of Axis Long Term Equity Fund. I have told you about the performance and risk of the fund. Now you know that this is a well-managed fund. Do you also want to know why Axis Long Term Equity Fund is an outperformer? Read the top 10 reasons which have made Axis long Term Equity Fund Best ELSS.