Is Axis Long Term Equity Mutual Fund Still a Good Choice for Fresh Purchases?

Axis Long Term Equity Fund is a popular tax-saving mutual fund scheme that primarily invests in equities and equity-related instruments. As part of the Equity Linked Savings Scheme (ELSS), this fund offers attractive tax benefits and is an open-ended investment option. In this comprehensive review, we will delve into the features, performance, portfolio, and suitability of the Axis Long Term Equity Fund, and compare it with its peers to help you make an informed decision.

Features of Axis Long Term Equity Fund

Launched on December 29, 2009, Axis Long Term Equity Fund has a robust track record of over 13 years. As of June 30, 2023, the fund had a size of Rs. 31187 crore, making it one of the largest ELSS funds in the industry. The fund offers cost-effective ratios below the category average of 1.9, with 1.56 for the regular plan and 0.86 for the direct plan.

Axis Long Term Equity Fund aims to capitalize on the long-term potential of the Indian stock market by investing in reputable businesses with strong fundamentals and sustainable growth strategies. The fund is characterized by its diversified portfolio, which covers various market capitalizations, sectors, and themes. As of June 30, 2023, the fund's equity exposure stood at 96.43%, while its debt exposure was 0.59%, and its cash and cash equivalents exposure was 2.98%. Specifically, the distribution of equity exposure is as follows: 58.97% in large-cap businesses, 30.12% in large-cap stocks, 9.52% in mid-cap stocks, and 1.39% in small-cap companies.

Evaluation and Comparison

Is Axis Long Term Equity Fund still a good choice for fresh purchases? The answer is resounding yes. However, it's important to consider alternative options that might offer similar or better returns with lower expense ratios. Mirae Asset is one such fund that shares similar performance but comes with a lower expense ratio, making it a compelling alternative.

Investors might also notice that Axis Long Term Equity Fund specifically avoids investments in public sector undertakings (PSUs), which could be a consideration based on risk tolerance. If performance is the primary criterion, Axis and Mirae funds often top the charts in ELSS categories.

Conclusion and Recommendations

For investors seeking tax savings under Section 80C of the Income Tax Act 1961 and looking for a long-term equity mutual fund, Axis Long Term Equity Fund remains a strong contender. However, for those seeking the lowest expense ratios, Mirae Asset is a viable alternative. Both funds share many similarities in terms of performance and portfolio management, making their choice a matter of personal preference, risk tolerance, and specific needs.

Ultimately, the decision to invest in either Axis Long Term Equity Fund or any other tax-saving mutual fund should be based on a thorough analysis of your financial goals, tax planning requirements, and risk appetite.