Axis Long Term Equity Fund is an open-ended, highly diversified equity fund that aims to provide long-term capital appreciation and income for the investor. The fund invests primarily in mid-cap and large-cap companies with a sustainable business model and a small amount of corpus in small-scale companies with strong growth potential and sustainable business models. This fund has a component of debt and other fixed money market instruments, which gives it some degree of stability during volatile market periods.
Axis Long Term Equity Fund Liquidity
In this scheme, potential investors will be able to buy units on all business days at Net Asset Value (NAV) -managed prices. Under this scheme, unit redemption will be possible only after the maturity period of 3 years from the allocation date. The repurchase price of these units will be issued daily and, under normal circumstances, will be sent to the buyer within ten working days from the date of receipt of the request for refund of repayment.
Considerations of Axis Long Term Equity Fund
Axis Long Term Equity Fund is a mutual fund that is based on equity and thus carries the risks associated with this fund. Equity mutual funds invest portfolios primarily in corpus and are therefore vulnerable to market volatility. Investors of such schemes should understand that returns will not be guaranteed, and the investment will have a lock-in period of 3 years, before which there is no possibility of redeeming the units.
Since the fund is an equity-based mutual fund and is affected by market fluctuations, investors are encouraged to have a long investment horizon of at least five years to see adequate returns on their investments and benefit from compounding returns.
Tax implications of Axis Long Term Equity Fund
Under Section 80C of the Income Tax Act, 1961, the Axis Long Term Equity Fund is eligible as an Equity Linked Saving Scheme (ELSS); Investors in ELSS can claim a deduction of up to Rs 1.5 lakh from their taxable income or the amount invested, whichever is less. Long-term capital gains tax will be applicable at the time of unit redemption @ 10 percent prescribed under the Income Tax Act.
Performance of Axis Long Term Equity Fund
Axis Long Term Equity Fund has performed below its S&P BSE 200 benchmark since its inception in December 2009, only once in 2016. Between 2013 and 2015, the fund’s performance mostly allowed it to beat the benchmark.
In 2015 the Axis Long Term Equity Fund was still able to provide positive returns to its investors as the rest of the market struggled. The fund’s alpha, also known as active returns, has decreased over the past two years, but it begins to judge its performance very soon.
Conclusion: The Axis Long Term Equity Fund is one of the most stable, high-performing funds in today’s market. The fund shows higher alpha by and low beta as compared to its peers.