Axis Long Term Equity Fund: A Beginner's Guide To Investing

Investing in mutual funds can be a great way to build wealth over time, but it's important to understand the risks and potential benefits before getting started. Mutual funds, including the Axis Long Term Equity Fund, are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. While mutual funds offer professional management, diversification, and convenience, they are subject to market volatility and may not be suitable for short-term investment goals. When considering investing in the Axis Long Term Equity Fund, it's essential to evaluate the fund's performance, risk profile, and investment objectives to ensure alignment with your financial goals and risk tolerance.

The minimum investment amount for the Axis Long Term Equity Fund is ₹500 via lump sum and ₹500 via SIP

To start investing in the Axis Long Term Equity Fund, it is important to understand the associated costs and procedures. The Axis Long Term Equity Fund has a minimum investment amount of ₹500, whether investing via a lump sum or Systematic Investment Plan (SIP). This fund falls under the Equity category of Axis Mutual Funds, which typically deliver the highest returns to investors.

When considering investing in mutual funds, it is essential to assess your financial goals and risk tolerance. Equity mutual funds, such as the Axis Long Term Equity Fund, invest primarily in equity and equity-related instruments, offering the potential for considerable returns. However, it is important to remember that these funds also carry inherent volatility and moderate to high-risk levels.

Before investing, it is advisable to evaluate the fund's historical performance, expense ratio, and portfolio composition. The Axis Long Term Equity Fund has delivered annualised returns of 12.19% over the past three years and 14.02% in the last five years. The expense ratio, which represents the annual fees charged by the fund, is currently 1.51%, slightly above the category average of 1.84%.

In terms of portfolio composition, the fund maintains a diverse portfolio, investing primarily in domestic equities. As of July 31, 2024, the fund had 51.21% of its investments in Large Cap stocks, 21.45% in Mid Cap stocks, and 5.11% in Small Cap stocks. The portfolio turnover ratio, indicating how frequently the fund manager adjusts the portfolio, is 46.00%, slightly higher than the category average of 407.30%.

When investing in the Axis Long Term Equity Fund, it is important to remember that there is a three-year lock-in period for these equity-oriented mutual funds. Additionally, long-term capital gains tax will be applicable when you sell your investments after three years. Ensure you review the fund's performance, risk metrics, and tax implications before making any investment decisions.

The fund has given 12.19% annualised returns in the past three years and 14.02% in the last five years

The Axis Long Term Equity Fund has delivered strong annualised returns over the past three and five years, making it a compelling investment option. With a three-year annualised return of 12.19% and a five-year annualised return of 14.02%, the fund has consistently outperformed its peers.

When considering investing in the Axis Long Term Equity Fund, it is essential to evaluate its performance over time. The fund's ability to generate consistent returns highlights its potential for long-term wealth creation. The annualised returns indicate that the fund has delivered steady growth, even during market fluctuations.

The fund's three-year annualised return of 12.19% is impressive, outpacing the returns offered by many other investment options. This return signifies the fund's ability to provide solid growth over a relatively short period. For investors seeking to build their wealth rapidly, this fund presents an attractive opportunity.

Moreover, the fund's five-year annualised return of 14.02% underscores its long-term potential. This return demonstrates the fund's ability to deliver sustained growth over an extended period, making it ideal for investors with a long-term investment horizon. The consistency in returns over five years reinforces the fund's reliability and robustness.

The Axis Long Term Equity Fund's strong performance can be attributed to its strategic investment approach. The fund primarily invests in equity and equity-related instruments, leveraging the expertise of its management team to identify high-growth opportunities. The fund's focus on diversification helps mitigate risks and maximise returns, contributing to its impressive track record.

In summary, the Axis Long Term Equity Fund's annualised returns of 12.19% and 14.02% over three and five years, respectively, showcase its ability to generate consistent and competitive returns. This fund is well-suited for investors seeking robust long-term growth potential, making it a prudent choice for those looking to build their wealth over time.

The Axis Long Term Equity Fund falls under the equity category of Axis Mutual Funds

The minimum investment amount for the Axis Long Term Equity Fund is ₹500 via a lump sum and ₹500 via SIP. The NAV of this fund is ₹70.6517 as of 01-Nov-2023, and the AUM is ₹31,887 Cr as of 30-Sep-2023. The expense ratio is 1.55.

To invest in the Axis Long Term Equity Fund, you can buy mutual funds directly from the website of the fund house, such as the Axis Mutual Fund website. Alternatively, you can use platforms like MF Central and MF Utility. If you prefer not to buy mutual funds online, you can seek help from a mutual fund distributor, including most banks.

It is important to note that there is a lock-in period for this fund, and you cannot withdraw your money before completing three years from the date of investment.

The fund has a moderate to high-risk quotient

When considering investing in the Axis Long Term Equity Fund, it is important to understand the associated risks. This fund has a risk quotient that ranges from moderate to high. While it implies lower risk than other equity investments, there is still inherent volatility.

The Axis Long Term Equity Fund is a type of mutual fund that invests primarily in equity and equity-related instruments. These funds typically deliver higher returns than other types of mutual funds but also carry a higher level of risk. The fund aims to generate regular long-term capital growth by investing in a diversified portfolio of equity and equity-related securities. This diversification helps to reduce the risk associated with investing in any particular company.

However, it is important to note that the fund has a very high-risk rating according to SEBI's Riskometer. This means that investors need to be prepared for potential ups and downs in their investment value. There is also a lock-in period of three years, during which investors cannot withdraw their money. This long-term commitment is a key factor in the fund's risk profile.

The Axis Long Term Equity Fund's performance has been strong, with returns currently better than the category average. The fund's holdings are mostly in Large Cap stocks and debt instruments, indicating a conservative investment strategy. However, despite this conservative strategy, the fund is still subject to the inherent volatility of the equity market.

Overall, while the Axis Long Term Equity Fund offers the potential for strong returns, it is important for investors to carefully consider their risk tolerance before investing. The fund's moderate to high-risk quotient means that it may not be suitable for those with a low-risk appetite or those who need to redeem their investment in the short term.

The fund is suitable for investors looking to invest for at least three years and seeking additional benefits of income tax saving

The Axis Long Term Equity Fund is a great investment option for investors looking to invest for at least three years and seeking additional benefits of income tax saving. Here's why:

Tax Benefits

The fund offers tax benefits under Section 80C of the Indian Income Tax laws. Investments of up to Rs. 1.5 lakh in a financial year in this fund are exempt from tax. This makes it a great option for investors looking to save on income tax while investing for the long term.

Capital Appreciation

The primary objective of the fund is to provide capital appreciation to its investors. By investing in a diversified portfolio of equity and equity-related securities, the fund aims to generate regular long-term capital growth. This means your investment has the potential to grow over time, providing you with higher returns.

Diversification

The fund is diverse in nature, investing in a mix of large-cap and mid-cap stocks. Mid-cap stocks provide the boost in returns, while large-cap stocks bring stability and regular returns. This diversification helps to reduce the overall risk associated with investing, without sacrificing potential gains.

Lock-in Period

The fund has a lock-in period of three years, which ensures that your capital remains invested in the market for a substantial period. This feature allows you to ride out any short-term volatility or downturns in the capital market, giving your investments a better chance to grow over the long term.

ELSS Advantage

Being an Equity Linked Saving Scheme (ELSS), the Axis Long Term Equity Fund offers the dual benefit of wealth creation and tax savings. ELSS funds have a shorter lock-in period compared to other tax-saving investment options, making them a more flexible choice for investors.

In summary, the Axis Long Term Equity Fund is a suitable investment option for those seeking long-term capital appreciation, tax savings, and a diversified portfolio. The fund's performance, tax benefits, and focus on equity as an asset class make it a compelling choice for investors with a mid-to-long-term investment horizon, such as planning for children's education, retirement, or purchasing significant assets.

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