Axis Long Term Equity: Largest ELSS Tax Saving Fund in India

The Axis Long-Term Equity Fund is very popular as a tax-saving fund, with the dual purpose of tax savings (under Section 80C) and equity-linked saving scheme (ELSS) for long-term wealth creation among investors. The scheme is suitable for investors who earn long term income by investing in a diversified portfolio of equity and equity-related instruments.

The Axis Long Term Equity Fund was introduced by Axis Mutual Fund on 29 December 2009. Being a multi-cap fund, the Axis Long Term Equity Fund is a moderately risky bet and is suitable for investors who have a long-term investment horizon of over five years.

Axis Long Term Equity Fundis a high-risk, multi-cap tax saving fund. The fund’s investment strategy focuses on purchasing quality growth stocks. The fund is looking for better and scalable businesses, higher returns on capital while choosing stocks, and secular growth. By bottom-up stock picking, it invests in quality businesses for the long term.

In 3-5-year returns, the fund increased the average category by 4-10 percentage points and the 3-7-year return index by 1-7 percentage points. The fund, which started five years ago, has an SIP of Rs 5,000 to Rs 4.27 lakh.

The fund has been known for its consistent performance since its inception in 2009. It falls in the top 5 in the Tax Savings Fund category.

Fund manager:

Mr. JineshGopani has been managing the fund since 1 April 2011 and is managing the fund very well. He is Head, Equity-Axis AMC, and has 14 years of working experience. He was an important force behind the fund’s outstanding performance. Their specific investment philosophy is not to compromise on quality, even though it may be weak in the short term.

Some critical positives of the fund are:

  • The fund managers have excellent stock-picking capabilities and are always open to new long-term growth stories and the ability to correct wrong calls for investment.
  • The fund adopts a ‘bottom-up’ approach that matters in the market for stock pickers.
  • Investments that are always supported by a strong investment strategy are investment quality enterprises – either a large-cap or a mid-cap to produce superior returns.
  • The fund manager allocates a significant portion of the portfolio to quality blue chips that are not only stable during a market downturn but can also show substantial growth.
  • The fund never compromises on quality and does not pursue momentum, which is the long-term identity of a super fund.
  • The fund is set to underperform for long-term gains in the short term.
  • There is less turnover in the portfolio as the fund manager is ready to ‘buy and keep quality companies’ for a more extended period.
  • The fund avoids cyclical stocks and sectors that are highly regulated.
  • Any stockholding in the portfolio must pass criteria such as excellent management, pricing power, free cash flow generation, clean books, and visibility of long-term growth prospects.
  • The fund invests in a spectrum of market capitalization, giving it greater flexibility.

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