Golden Rule: Returns increases with Risk!

By Rahul  Pithadia -

The essence of risk-return trade-off is embodied with an old quote “no risk no return”. To understand this relationship completely you must know your comfort levels and risk bearing ability depending upon the financial needs and backups. The major risk in today’s world is the loss of capital so that should be kept in mind. Never make an investment where there is the loss of complete capital. If you are still stuck with questions regarding your investments the solution is here for you. The below fund also has tax benefits which is another form of return every year.

Axis Long Term Equity Fund – Growth Daily Chart

Axis Long Term Equity Fund

 

Axis Long Term Equity Fund –Growth is an open ended Equity Linked Saving Scheme [ELSS] which has a lock in period for 3 years.

Taxation: This fund aims for “SHARE LESS SAVE MORE”. This fund helps the investors to get tax rebates under section 80 C of Income Tax Act.

Portfolio Analysis: The major holdings of this fund are into Banking and Automotive sectors. Below is the table shown of Sectoral allocation of this fund.

Sector allocation 20160408

Returns: In past the fund has provided with following returns.

Returns 20160408

Risk: This fund has concentrated exposure to sectors and so the risk is high. Also we are seeing loss of momentum on upside which is a caution sign. Fresh investments should be done in form of SIP only with time horizon of three years or more.

Investment rationale: Axis Long Term Equity ELSS scheme can show some underperformance as the overall equity market is undergoing through sideways to negative correction. The long term uptrend should resume after few months of correction. Till then investments can be done in this fund by way of SIP. Any retracement towards 23.6% retracement zone at 27-28 levels will provide good entry level that will help to ride the next wave of bull trend over coming years!

 

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