Maximizing Returns with Axis Equity Long-Term Fund
Axis Equity Long Term Fund is an open-ended equity scheme that invests predominantly in large-cap blue-chip companies with a long-term perspective. Launched in February 2010, this fund aims to generate long-term capital appreciation while also providing equity taxation benefits. Here are some tips to maximize returns from the Axis Equity Long Term Fund:
Opt for a Long-Term Investment Horizon
Axis Equity Long Term Fund follows a buy-and-hold strategy with low churn in the portfolio. The fund manager invests in sector leaders, focusing on wealth creation over the long term. Hence, this fund is ideal for investors willing to remain invested for at least 5-7 years to realize full growth potential.
Use a systematic investment plan.
By investing through the Systematic Investment Plan (SIP) mode, investors can accumulate more units when market valuations are attractive without worrying about timing the market. SIP allows rupee cost averaging and the power of compounding to enhance overall gains.
Reinvest the dividends.
Axis Equity Long Term Fund has declared regular dividends since its inception. Instead of a payout, investors can choose to reinvest the dividend to compound their corpus. Reinvested dividends will purchase additional units of the fund as per the applicable NAV.
Claim Tax Benefits
As an equity-linked savings scheme (ELSS), the axis bluechip fund offers tax deduction benefits under Section 80C up to Rs. 1.5 lakh for new investments. Long-term capital gains above Rs. 1 lakh are taxed at 10%, while dividend income is tax-free in the hands of the investor.
Take advantage of any market correction.
While Axis Equity Long Term Fund invests for the long run, investors should take advantage of any significant market correction or volatile phases to increase their SIP amount. This accelerates unit accumulation, skewing the overall cost.
Optimal Asset Allocation
Being a focused large-cap fund, axis equity long term fund should be limited to 25–30% of the overall portfolio. Balance should be spread across debt, gold, and mid/small caps for diversification.
Lock-in Gains
Investors may book partial profits and withdraw capital selectively after sizable appreciation while allowing core investments to remain invested for the long term.
Track Performance
Investors should track the performance of the Axis Bluechip Fund relative to the category average and benchmark to assess if their investment objectives are being met sufficiently.
Increased investment in corrections
Any significant corrections in stock prices represent a good opportunity from a valuation perspective for investors to enhance their investments.
Rebalance Portfolio
As the fund grows substantially over the long term, investors may need to rebalance by switching partial amounts into other categories to maintain allocation levels.
Conclusion
Axis Equity Long-Term Fund provides exposure to India’s growth story through pedigree blue-chip companies. Adopting a long-term approach of at least 5-7 years along with smart strategies like SIP and reinvesting dividends can help investors maximize wealth creation. However, as with any equity fund focused on a limited number of stocks, some volatility is to be expected. Hence, a moderate allocation of 20–30% as per risk profile, along with ongoing expert assistance from quality investment platforms like 5paisa, is advisable to meet long-term financial goals while managing risks optimally.
