Table of Contents
Axis Long Term Equity Fund and L&T Tax Advantage Fund both belong to the ELSS category of Mutual Funds. ELSS or Equity Linked Savings Schemes are the Mutual Fund schemes that give investors the benefits of both Investing as well as tax Deduction. These schemes predominantly invest their corpus in equity and equity-related instruments while the remaining portion in fixed Income instruments. Individuals investing in ELSS can claim a tax deduction of up to INR 1,50,000 under sec 80C of income tax Act, 1961. However, being a Tax Saving Investment, ELSS has a lock-in period of three years which is shortest as compared to other tax saving avenues. Though both Axis Long Term Equity Fund and L&T Tax Advantage Fund both belong to the ELSS category, yet there exist differences between them. So, let us understand the differences through this article.
Axis Long Term Equity Fund is a part of Axis Mutual Fund. This open-ended ELSS scheme was launched on December 29, 2009. The objective of Axis Long Term Equity Fund is to achieve Capital appreciation in the long-term along with regular income that is generated from a diversified portfolio predominantly consisting of equity and equity-related instruments. The scheme uses S&P BSE 200 Index as its benchmark to construct its portfolio. As on March 31, 2018, some of the top holdings of Axis Long Term Equity Fund consisted of HDFC Limited, Bajaj Finance Limited, Maruti Suzuki India Limited, and TTK Prestige Limited. Axis Long Term Equity Fund is solely managed by Mr. Jinesh Gopani. This scheme is suitable for individuals looking for an investment horizon of 3-5 years.
L&T Tax Advantage Fund is an open-ended ELSS scheme that was launched in the year 2006. The scheme uses S&P BSE 200 TRI Index as its benchmark to construct its portfolio and is managed by L&T Mutual Fund. The objective of this scheme is to attain capital appreciation over long-term from a portfolio whose significant portion has exposure in equity instruments. The fund manager managing L&T Tax Advantage Fund is Mr. S. N. Lahiri. As per the scheme’s objective, it invests around 80-100% of its corpus in equity and equity-related instruments while the remaining in Fixed Income instruments. Some of the key benefits of the scheme are a two-in-one benefit of investing and tax deduction, greater diversification for risk control, and 360-degree research.
Though both Axis Long Term Equity Fund Vs L&T Tax Advantage Fund belong to the same category, yet; they differ on numerous accounts such as performance, current NAV, AUM, and so on. So, let us understand the differences between the schemes based on these parameters that are divided into four sections which are given below as follows.
It is the first section in the comparison of both the schemes. The comparable elements of the basics section include current NAV, fincash rating, and scheme category. To begin with the scheme category, it can be said that both Axis Long Term Equity Fund and L&T Tax Advantage Fund belong to the same category, that is, Equity ELSS. The comparison of Fincash Rating reveals that Axis Long Term Equity Fund is a 3-Star rated scheme while L&T Tax Advantage Fund is a 4-Star rated scheme. Even, the comparison of current NAV reveals that there is a difference between the NAV of both the schemes. As on April 23, 2018, the NAV of Axis Long Term Equity Fund was approximately INR 43 while of L&T Tax Advantage Fund was approximately INR 56. The summary comparison of basics section is tabulated as follows.
Parameters Basics NAV Net Assets (Cr) Launch Date Rating Category Sub Cat. Category Rank Risk Expense Ratio Sharpe Ratio Information Ratio Alpha Ratio Benchmark Exit Load Axis Long Term Equity Fund
Growth
Fund Details ₹69.4051 ↑ 0.13 (0.19 %) ₹27,628 on 30 Jun 22 29 Dec 09 ☆☆☆ Equity ELSS 20 Moderately High 1.68 -0.99 -0.59 -13.05 Not Available NIL L&T Tax Advantage Fund
Growth
Fund Details ₹79.636 ↑ 0.11 (0.13 %) ₹2,875 on 30 Jun 22 27 Feb 06 ☆☆☆☆ Equity ELSS 7 Moderately High 2.03 -0.64 -1.06 -6.5 Not Available NIL
The comparison of Compounded Annual Growth Rate or CAGR returns at different time intervals is done in the performance section. These time intervals include 1 Month Return, 6 Month Return, 3 Year Return, and Return Since Inception. The comparison of performance section reveals that in almost all the time intervals, the performance of Axis Long Term Equity Fund is better as compared to the performance of L&T Tax Advantage Fund. The table given below shows the summary comparison of the performance section.
Parameters Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch Axis Long Term Equity Fund
Growth
Fund Details 11.7% 12.9% 1.5% -0.8% 16.3% 12.9% 16.6% L&T Tax Advantage Fund
Growth
Fund Details 10.3% 11.2% 3.4% 4.4% 16.1% 9% 13.4%
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Being the third section in the comparison, it analyses the differences in the absolute returns generated by both the schemes for a particular year. The comparison of absolute returns section also reveals that the performance of Axis Long Term Equity Fund in many instances is better as compared to L&T Tax Advantage Fund. The comparison summary of the yearly performance section is as shown in the table given below.
Parameters Yearly Performance 2021 2020 2019 2018 2017 Axis Long Term Equity Fund
Growth
Fund Details 24.5% 20.5% 14.8% 2.7% 37.4% L&T Tax Advantage Fund
Growth
Fund Details 30.3% 13.5% 4.6% -8.1% 42.3%
This being the last section, it compares the elements such as AUM, minimum SIP and lumpsum investment, and exit load. The comparison of minimum SIP investment reveals that the SIP amount for both the schemes is same, that is, INR 500. In addition, the minimum lumpsum amount is also same for both the schemes, that is, INR 500. However, the comparison of AUM reveals that there is a significant difference between both the schemes. As on March 31, 2018, the AUM of Axis Long Term Equity Fund is approximately INR 15,898 Crores while of L&T Tax Advantage Fund is INR 3,016 Crores. The comparison of exit load reveals that there is no exit load for both the schemes as they are ELSS ones that have a lock-in period of three years. The comparison of other details section is summarized in the table given below.
Parameters Other Details Min SIP Investment Min Investment Fund Manager Axis Long Term Equity Fund
Growth
Fund Details ₹500 ₹500 Jinesh Gopani - 11.34 Yr. L&T Tax Advantage Fund
Growth
Fund Details ₹500 ₹500 Vihang Naik - 2.62 Yr.
Axis Long Term Equity Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Jul 17 ₹10,000 31 Jul 18 ₹11,720 31 Jul 19 ₹11,365 31 Jul 20 ₹11,598 31 Jul 21 ₹17,549 31 Jul 22 ₹17,117 L&T Tax Advantage Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Jul 17 ₹10,000 31 Jul 18 ₹10,859 31 Jul 19 ₹9,771 31 Jul 20 ₹9,565 31 Jul 21 ₹14,475 31 Jul 22 ₹14,516
Axis Long Term Equity Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 2.01% Equity 97.99% Equity Sector Allocation
Sector Value Financial Services 32.33% Consumer Defensive 14.31% Technology 10.92% Basic Materials 10.48% Consumer Cyclical 9.43% Health Care 8.37% Communication Services 5.85% Utility 4.45% Industrials 1.85% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bajaj Finance Ltd (Financial Services)
Equity, Since 30 Sep 16 | 5000349% ₹2,382 Cr 4,410,723
↓ -101,028 Avenue Supermarts Ltd (Consumer Defensive)
Equity, Since 30 Apr 17 | 5403768% ₹2,346 Cr 6,886,468 Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 17 | TCS8% ₹2,142 Cr 6,555,472
↓ -900,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 May 11 | KOTAKBANK7% ₹1,835 Cr 11,047,241 Info Edge (India) Ltd (Communication Services)
Equity, Since 31 May 14 | NAUKRI6% ₹1,615 Cr 4,296,430
↓ -23,843 Nestle India Ltd (Consumer Defensive)
Equity, Since 31 Aug 14 | NESTLEIND6% ₹1,609 Cr 920,790
↑ 12,474 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Jan 10 | HDFC5% ₹1,441 Cr 6,639,834 Divi's Laboratories Ltd (Healthcare)
Equity, Since 30 Nov 17 | DIVISLAB5% ₹1,366 Cr 3,763,017
↑ 186,835 Pidilite Industries Ltd (Basic Materials)
Equity, Since 30 Nov 14 | PIDILITIND5% ₹1,316 Cr 6,299,052
↑ 112,482 Torrent Power Ltd (Utilities)
Equity, Since 30 Jun 13 | 5327794% ₹1,228 Cr 27,193,611 L&T Tax Advantage Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 2.21% Equity 97.79% Equity Sector Allocation
Sector Value Financial Services 26.74% Consumer Cyclical 22.58% Technology 16.82% Energy 10.1% Basic Materials 7.13% Utility 4.4% Industrials 3.49% Health Care 3.32% Consumer Defensive 1.75% Real Estate 1.46% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 21 | RELIANCE10% ₹290 Cr 1,118,400 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | ICICIBANK9% ₹253 Cr 3,572,500 Infosys Ltd (Technology)
Equity, Since 31 Mar 06 | INFY8% ₹220 Cr 1,502,500
↑ 101,600 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 06 | HDFCBANK6% ₹168 Cr 1,249,400
↑ 702,100 State Bank of India (Financial Services)
Equity, Since 31 Jan 19 | SBIN6% ₹161 Cr 3,445,000 Indian Hotels Co Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | 5008504% ₹102 Cr 4,540,577 Titan Co Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | TITAN3% ₹96 Cr 496,500 Persistent Systems Ltd (Technology)
Equity, Since 31 Jul 21 | PERSISTENT3% ₹87 Cr 254,600 Tata Motors Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | TATAMOTORS3% ₹85 Cr 2,075,100 SRF Ltd (Basic Materials)
Equity, Since 31 Jul 21 | SRF3% ₹78 Cr 344,800
Therefore, it can be concluded that both the schemes differ on account of various parameters. As a result, individuals should be careful while investing in any of the schemes. They should check whether the scheme suits their investment objective and understand its modalities completely. This will help them to attain their objectives on time and ensure that their investment is safe.