Axis Long Term Equity (ELSS) is a Rs 11000+ Crore Tax Saving fund that was launched in Dec 2009. Since then it has generated around 18% annually.
It has among the lowest risk ELSS funds along with maximum sharpe ratio.
This is a tax saving (ELSS) fund. Hence, investment in this fund is exempt from taxes under 80C. This fund has a lock-in of 3 years and post that it has zero tax on returns generated.
Too good to be true right.
Lets look the pros and cons of the fund to understand it better.
- Expense Ratio of ~1.98% among least in the industry
- 5y Returns at 21% (2x benchmark)
- 3y Returns at 24% (1.5x benchmark)
- Sharpe Ratio at 1.24 (really good)
- 11k+ AUM (Mutual fund hasn’t able to provide good returns since its AUM crossed Rs 5000 Cr in 2015 end)
- 1y Returns at 13% (0.5x of benchmark)
- 3m Returns at 1% (0.25x of the benchmark)
- Annual returns in last 2 years really bad compare to benchmark
- Very high P/E of 28 and P/B of 4.3
- Sector concentration on Financials and Auto
This fund hasn’t tested the recessions.
|Axis Long Term Equity Fund||14%||25%||21%|
|Benchmark (Nifty 500)||26%||18%||12%|
This fund has given awesome performance till its size was below Rs. 5000 Cr. But since it has crossed that value its performance deteriorated. I would suggest to wait for some time and review its performance before putting more money into it.
Disclaimer: This is not an investment advice.