BOI Axa Midcap Tax Fund Series 2 is a 10 year long ELSS (tax saving) fund with a focus on midcap stocks. Ordinary ELSS funds have a lock-in of three years but this fund goes above and beyond this period to a 10-year time horizon.
The fund will invest 65-100% of its assets in midcap stocks and 0-35% in other types of companies or in debt. Midcaps are defined as those falling between the 101st and 250th largest listed company by market cap. Saurabh Kataria will be the fund manager. He has nine years of experience with BOI Axa Mutual Fund and also manages the BOI Axa Tax Advantage and BOI Axa Equity Rebalancer Funds. BOI Axa Tax Advantage has underperformed over the past year but has beaten its benchmark over the long term. Here are its returns:
|Fund/Index||1 yr||3 yrs||5 yrs|
|BOI Axa Tax Adv||12.7%||10.6%||18.3%|
|Nifty 500 TRI||8%||10.2%||16.2%|
Source: Value Research. Figures as on 17th July 2018
The fund opened for subscription on 12th July 2018 and will close on 11th October 2018. It will be benchmarked against the Nifty Midcap 100 (Total Returns Index).
The fund’s 10-year tenure is longer than most close ended mutual funds. The long tenure can allow the fund manager to focus on a buy and hold strategy without the pressure of redemptions. The focus on midcap can also lead to higher returns as some of the fund’s picks grow rapidly and become large caps over time. On the flipside, the long tenure can induce a level of complacency and reduce the incentive to perform. In either case, BOI Axa Midcap Tax Fund Series 2 is a fund for highly patient investors.
NFO Period: 12th July to 18th October
Tenure: 10 years
Minimum investment amount: Rs 500
Fund Manager: Saurabh Kataria
Options: Growth and Dividend Payout