Axis Long Term Equity Fund Vs L&T Tax Advantage Fund

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

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

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.

Axis Long Term Equity Fund Vs L&T Tax Advantage Fund

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.

Basics Section

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.

Performance Section

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.

Yearly Performance Section

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.

Other Details Section

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.

Growth of 10k Investments over the years