Axis Bank Tax Saver Mutual Funds

Investment Objective

Diversified equities funds like the Axis ELSS mutual funds are designed to give investors a chance to accumulate wealth over time. The fund's primary investments are in equities and equity-related derivatives in a specific proportion. After thorough research, the fund manager will choose high-quality equities to guarantee that the portfolio returns continue to meet expectations. The lock-in period is three years. Under Section 80C of the Income Tax Act, you are qualified for a tax deduction of up to INR 1.5 lakh when you invest in Axis ELSS mutual fund schemes. Your investment is deducted from your taxable income, in this case, decreasing your overall tax obligation.

Risks Involved in Axis Tax Saver Mutual Fund

Compared to debt funds and balanced funds, the market risk carried by Axis ELSS mutual funds ranges from fairly high to high. The value of the fund may change as and when the price of the underlying stock does. The Axis ELSS fund risk is less than pure small-cap/mid-cap funds and sector/theme-based funds because of their well-diversified portfolios. Moreover, if you invest over extended periods, the risks may average out. Before investing in the plan, investors may take into account their risk appetite.

Return Potential of Axis Tax Saver Mutual Fund

You receive rewards from investing in Axis ELSS mutual fund schemes in the form of recurring dividend payments and capital growth. Increases in the underlying stock prices over a specific investment horizon lead to capital appreciation. The three-year lock-in period enables the fund manager to decide on asset allocation without worrying about frequent fund redemptions. Long-term returns might be higher as a result of this comprehensive strategy. Historically, ELSS funds have been known to produce returns that range from 12% to 15% on average over a period longer than 5 years. However, Axis ELSS fund returns are not guaranteed, and their performance may change over time. An aggressive investor can think about including a few small-cap or mid-cap funds in the total portfolio to increase returns.

Who Should Invest inAxis Tax Saver Mutual Fund?

For investors who are more willing to take on risk, Axis ELSS mutual funds are the best option. Comparing these funds to other tax-saving options, their three-year lock-in term is the shortest. They are, therefore, perfect for long-term, tax-efficient wealth growth. Investors can use the funds to fund long-term objectives like saving for retirement, financing a home purchase, and educating their children.

Things To Consider Before Investing in Axis ELSS Mutual Fund

An organised and disciplined investment strategy is necessary for the protracted trip that is investing. People make commitments to maintain discipline in their financial journeys, but the majority of them fail for one reason or another. Investors often prematurely withdraw their assets as a result of emotional responses to market volatility, which only results in greater investment losses than gains. In the long run, markets typically rebound and may assist investors in building long-term wealth, so investors who are diligent with their investments may not need to worry about continual market volatility. Even yet, long-term wealth creation requires individuals to develop a sound investing strategy and stick to it. It is impossible to participate in any form of investment strategy without sufficient financial planning. One must consider these things before investing in Axis ELSS mutual funds.