Stocks markets have done very well over the last few years and the returns are beginning to get reflected in mutual fund performance. While most mutual funds have done well, there are many that gives reasons for optimism to invest and one among those is Axis Long Term Equity Fund.
Here are 5 reasons to invest in the Axis Long-Term Equity Fund
1. Solid returns
If you had to invest Rs 1 lakh in the fund, three years ago, it would have been worth Rs 1.6 lakhs today. The returns are an annualized 16.89 per cent, which is double of what bank fixed deposits offer.
If you had to start an SIP with Rs 10,000 each month, in 36-months your investment would be Rs 3.6 lakhs, but, your present value would be Rs 4.36 lakhs, giving whopping returns.
Even over the longer term the returns have been fantastic, with a 10-year annualized returns of more than 17 per cent.
2. 5-star ratings
Axis Long-Term Equity Fund has a 5-star rating from Value Research Online and Crisil. Both these are known to offer high quality in depth research and analysis and are no doubt credit worthy.
This fund has 98 per cent of its fund invested in stocks and almost 67 per cent of this is in high-quality large cap stocks. Besides the solid ratings there are many other reasons to invest in the Axis Long term Equity Fund. Let us examine those.
3. Tax savings
Axis Long-Term Equity Fund is an Equity Linked Savings Scheme (ELSS), which means you get tax benefits under Sec80C of the Income Tax Act. Investment under this section qualifies for a tax rebate of upto Rs 1.5 lakhs per annum.
Apart from this, ELSS is the only scheme that has a lock-in period of only three years, when compared to other tax saving schemes. This makes Axis Long-Term Equity Fund an even better investment bet. We are now in our tax planning season, which means you could make this fund, a part of your tax plans.
4. Solid portfolio
The fund has a very impressive portfolio including stocks like Bajaj Finance, Kotak Mahindra Bank, HDFC Bank, TCS, HDFC, Avenue Supermarkets and Bandhan Bank. All these stocks are high growth stocks, which are expected to grow in double digits in the years to come.
The top 7 stocks make-up almost 50 per cent of the portfolio of the fund. This makes the fund a good bet for long-term investing.
5. Reasonable SIP amounts
One can invest in the fund with a small SIP amount of Rs 500 per month. Apart from this, one can also invest with a small initial amount of Rs 500 to begin with. Many equity mutual funds have an initial amount that is much higher. One reason to invest through the SIP route is that you can rather easily hedge your risk in case the markets fall sharply. In fact, if it does, there is a possibility of adding to your SIP amounts each month.
We wish to inform readers, that mutual fund investments are subject to market risks, so please be careful. What has performed in the past, may not necessarily do so in the future.
The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.
About the author
Sunil Fernandes is the Managing Editor of Goodeturns.in. Sunil has spent 25 years reporting on equities, mutual funds in India and abroad.