Axis Long Term Equity Fund - Growth: The Top Performer in The Last 5 years Under the ELSS Category

Axis Long Term Equity Fund - Growth: The Top Performer in The Last 5 years Under the ELSS Category

Feb 27, 2018

Tax saving is important! And that’s what a good ELSS fund helps you do. With proper tax planning and saving, you can probably send your parents on a holiday, or gift your spouse with something valuable. But because most people take this aspect pretty casually, tax saving goes for a toss. Although there are many tax saving products in the market today, you should pick something that has offered consistent performance. And when it comes to consistency, Axis Long Term Equity Fund – Growth simply stands out.

Why this fund is important for you?

Axis Long Term Equity Fund – Growth will enable you to make tax savings on an investment of up to INR 1.5 lakhs per year. And with this much of investment, your savings can go up to around INR 46,350 annually. It is an Equity Linked savings Scheme, with a lock-in period of three years. And because investments under ELSS are eligible for tax deduction, you save on a lot of money.

Typically, the money in Axis Long Term Equity Fund – Growth remains parked in equity markets. And one of the most prominent characteristic of equity investments is that they grow over the long term. And the market risks also get reduced considerably.

Axis Long Term Equity Fund – Growth uses the lock in period of 3 years to its advantage, because of which a unique equity investment scenario gets created. The lock-in makes an alignment of the investor’s and the fund manager’s interests possible. So, both can reap long term benefits, by avoiding short term noise.

The scheme looks to invest in companies that can provide sustainable growth and create wealth over a period of 3-4 years. Because of this, the fund remains protected from the short-term volatility of stock prices and all temporary hiccups in the earnings of the companies in which it remains inveted. The fund manager treats the fund with a bottom up approach. That means, they judge individual stocks on the basis of their prospect, notwithstanding the overall market scenario or what the market benchmarks are like. This has enabled the fund to create value for investors, ever since its launch.

Key Features -

  • Axis Long Term Equity Fund – Growth is an ELSS fund, with a lock-in period of 3 years.
  • Most other tax saving instruments have lock-ins higher than three years. As a matter of fact, the 3-year lock-in is one of the lowest.
  • This fund makes your investment eligible for tax deduction under section 80 C of the Income Tax Act, of 1961.

This Product is suitable for you if -

  • You are looking for capital appreciation from your investment over a long-term horizon.
  • You are looking to invest in a diversified portfolio, having greater exposure to equity and equity linked instruments.
  • You want to start small. You can invest in this scheme with an amount of INR 500.

Now, let’s look at the scheme performance table of Axis Long Term Equity Fund – Growth below for a better understanding of the performance of the scheme over the last five years.

Source: Swaraj Wealth Research

In the first year of its inception, the scheme offered a return of 37.09%, while the market average stood at 38.37%. In the same year, the S&PBSE 200 benchmark was 33.26%. So, you can see here that the scheme gave outstanding returns even in its first year of launch. In the third year of the scheme’s advent, it gave a return of 13.76% against 14.65% offered by other comparable funds in the market. The benchmark for this year was 11.04%. In the fifth year of the scheme’s launch, it marked a return of 22.65%, as opposed to a benchmark of 13.79% and a market average of 18.71%. This gives us the total since-launch return offered by the scheme, which is 19.47%, way higher than the benchmark i.e. 14.12, and the market average of 17.39%.

Now, let’s also have a look at the rolling returns offered by the scheme, below.

The rolling returns offered by the scheme in the last 3 year’s duration, that is from 19th of December 2014 to 19th of December 2017, is 13.82%, whereas the rolling returns offered by other comparable funds in the market stand at 13.29%.

Source: Swaraj Wealth Research

Although the fund has done really well in the past five years, it’s suitability to different financial conditions of people may be different. And that is why you should consult your financial advisor regarding whether or not this ELSS fund is suitable to your needs and financial situations.

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