Mutual Funds

Axis Long-Term Equity: A six-year-old, with a consistent record

Nalinakanthi V | Updated on January 22, 2018 Published on September 20, 2015

bl21_Axis Long Term

Adept sector rotation has helped the fund beat its benchmark across market cycles

Haven’t made tax saving investments for the current fiscal yet? You can consider Axis Long Term Equity, an ELSS fund. Though it has a track record of just six years, it has consistently topped the return charts. Over the last four years, the scheme’s rolling one-year return has been higher than its benchmark 99 per cent of the time.

The fund has not only bettered its benchmark BSE 200 Index across all time periods but has also raced ahead of peers such as Franklin India Tax Shield, HDFC Tax Saver and ICICI Prudential Long Term Equity (formerly ICICI Pru Tax Plan). Its one, three and five-year returns have been higher than of BSE 200 Index by over 14 percentage points.

Given the three-year lock-in for investments made in ELSS schemes, lumpsum investment may be preferred over the systematic route. However, if you expect the market to remain volatile for a while now, the investment can be staggered over a period of time.



Contains downsides well

In the past, the fund has been able to contain the fall in its NAV during corrective phases better than its benchmark. This is despite the fund taking a fair bit of exposure to stocks in the small and mid-cap space. For instance, in the last one year, even as bellwether indices posted flattish to negative returns, the fund managed to deliver healthy double-digit returns. This was made possible by adept sector rotation by the fund manager, Jinesh Gopani, who has been managing the fund since its inception in December 2009.

The fund’s strategy to increase exposure to export-heavy themes such as IT, pharma and auto ancillaries, in the light of the depreciation of the rupee against the US dollar, provided a leg-up to its performance. The fund also reduced exposure to cyclical themes, such as financials, which aided performance.

Besides timely sector churns, the fund’s bets in the mid-cap space, such as Page Industries, WABCO India and PI Industries spiced up its returns. Now, about 70 per cent of the scheme’s assets are in large-caps and the rest in mid and small-cap stocks.

Historically, the fund has not only weathered volatility better than its benchmark but has also delivered superior returns during rallies. For instance, during the August 2013-March 2015 period, the fund’s NAV jumped by about 140 per cent even as the BSE 200 Index rose by about 75 per cent. Over the last six months, the fund has increased exposure to companies in the pharma, IT and logistics space.

Published on September 20, 2015

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.