Axis Long Term Equity Fund Vs Nippon India Tax Saver Fund (ELSS)

Axis Long Term Equity Fund and Nippon India tax saver Fund (Formerly known as Reliance Tax Saver Fund), both belong to the category of ELSS or Equity Linked Savings Scheme. These schemes give individuals the benefits of both Investing as well as a tax deduction. Individuals investing in ELSS can claim a tax deduction to a maximum limit of INR 1,50,000 under Section 80C of income tax Act, 1961.

Being a Tax Saving Scheme, these funds have a lock-in period of three years which is the lowest as compared to other tax savings scheme. Though both Axis Long Term Equity Fund and Reliance Tax Saver Fund (ELSS) belong to the same category yet; there exists a difference between both of them in terms of Current NAV, AUM, performance, and other factors. So, let’s compare and analyze both the schemes with respect to various parameters.

Axis Long Term Equity Fund

Axis Long Term Equity Fund is an open-ended ELSS scheme which was launched in December 2009. This scheme uses S&P BSE 200 Index to construct its Portfolio. Its objective is to generate capital growth over long-term by investing in a diversified portfolio which has a significant proportion equity and equity-related instruments. As on January 31, 2018, some of the top constituents of Axis Long Term Equity Fund include HDFC Limited, Bajaj Finance Limited, Kotak Mahindra Bank Limited, and Maruti Suzuki India Limited. The proportion of large-cap shares in case of Axis Long Term Equity Fund ranges between 50-100% while Midcap share’s proportion will not be more than 50%. Axis Long Term Equity Fund is fund is managed solely by Mr. Jinesh Gopani. This scheme is suitable for an investment horizon of 3-5 years.

Nippon India/Reliance Tax Saver Fund (ELSS)

Nippon India Tax Saver Fund (Formerly known as Reliance Tax Saver Fund) is managed by Nippon India Mutual Fund and is an open-ended tax saving scheme. The goal of this scheme is to generate capital appreciation in the long-term. This objective is accomplished by investing a significant proportion of its corpus in equity and equity-related instruments. Nippon India/Reliance Tax Saver Fund tries to maintain a balance between large cap and mid-cap companies in its portfolio and aims to invest in companies having high growth potential over the medium term. As on January 31, 2018, some of the company’s shares that form the top 10 holdings of Reliance Tax Saver Fund include State Bank of India, TVS Motor Company Limited, Tata Motors Limited, ICICI Bank Limited, and ABB India Limited. The fund manager who oversees the functioning of Reliance Tax Saver Fund is Mr. Ashwani Kumar.

Important Information

From October 2019, Reliance Mutual Fund has been renamed as Nippon India Mutual Fund. Nippon Life has acquired majority (75%) stakes in Reliance Nippon Asset Management (RNAM). The company will continue to run its operations without any change in structure and management.

Axis Long Term Equity Fund Vs Nippon India Tax Saver Fund

Though both Axis Long Term Equity Fund and Reliance/Nippon India Tax Saver Fund ELSS are of the same category, nevertheless; there exists a difference between them with respect to various attributes. Some of these parameters include AUM, Current NAV, performance, and much more. So, let us compare and understand the differences between both the schemes based on various parameters that are divided into four sections, namely, Basics Section, Performance Section, Yearly Performance Section, and Other Details Section.

Basics Section

Basics Section compares the various parameters such as Current NAV, Fincash Rating, scheme category, and much more. To begin with the scheme category, it can be said that both the schemes belong to the same category that is, Equity ELSS. The next category is Fincash Rating. Based on Fincash Ratings both the schemes have the same rating that is, 3-Star. Comparison of Current NAV shows that Reliance Tax Saver Fund (ELSS) leads the race. As on February 27, 2018, The NAV of Nippon India Tax Saver Fund (ELSS) is approximately INR 63 while of Axis Long Term Equity Fund is approximately INR 41. The summary of the basics section is shown in the table given below.

Performance Section

The performance section compares the Compounded Annual Growth Rate (CAGR) returns of both the schemes at different time intervals. These intervals include 3 Month Return, 1 Year Return, 5 Year Return, and so on. The performance section reveals that though there is not much difference between the returns generated by both the schemes. However, in almost many instances the returns generated by Axis Long Term Equity Fund is higher as compared to returns generated by Nippon India Tax Saver Fund. The summary of performance section is tabulated as follows.

Yearly Performance Section

The yearly performance section compares the absolute returns of both the schemes for a particular year. This section shows that in certain instances the performance of Nippon India/Reliance Tax Saver Fund (ELSS) is better and vice versa. The table given below summarizes the comparison of yearly performance section.

Other Details Section

This is the last section in comparison of both the schemes. The various elements that are compared in this section include Minimum SIP and Lumpsum Investment, AUM, and Exit Load. With respect to the Minimum SIP and lumpsum investment, the amount is same for both the schemes that is INR 500. The comparison of AUM of both the schemes reveals that there is a difference between both of them. As on January 31, 2018, the AUM of Reliance Tax Saver Fund (ELSS) is approximately INR 10,811 crores and of Axis Long Term Equity Fund is INR 16,517 crores. Also, both the schemes do not carry any exit load as they are ELSS. The other details section is tabulated as follows.

Growth of 10k Investments over the years