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Once a top performer in the tax-saving category, the Axis ELSS Tax Saver Fund faced a period of turbulence in recent years, sliding to the fourth quartile (bottom 25 per cent) in performance rankings.
But over the past 12 months, the fund has staged a quiet comeback, climbing back to the second quartile. Behind this steady revival is a recalibrated strategy, helmed by Ashish Naik, who took charge of the fund nearly two years ago.
The Axis Tax Saver ELSS Fund has seen meaningful changes over the past two years, moving from a concentrated portfolio to a more diversified and agile one. “We have reduced the concentration in some of the bigger names, which has given us the flexibility to add more positions,” says Ashish Naik, who co-manages the scheme with Shreyash Devalkar.
With exposure to newer sectors and smaller position sizes, the fund is now better positioned to adapt to fast-changing market cycles. While it retains its growth and quality tilt, the portfolio is now broader and more responsive to emerging opportunities.
“We've been more selective even as we've broadened the portfolio. And in a volatile environment, stable companies do tend to outperform, which has also supported the fund's performance,” added Naik.
Evolution
The fund, while staying true to its growth-and-quality DNA, has broadened its horizons to include sectors linked to India’s capex revival—Capital goods, Defense, Power transmission & distribution and even niche plays in pharmaceuticals like Contract Development and Manufacturing Organisation (CDMOs). This change in construct has made the portfolio more responsive to evolving market cycles.
If we look at the portfolio of Axis ELSS scheme, stocks such as Coromandel International, Crompton Greaves Consumer Electricals, HDFC Life Insurance and Blue Star have entered the portfolios in the recent months.
While the rebound in growth-oriented stocks has helped, Naik is quick to credit the fund’s proactive approach. It’s not just about riding tailwinds. The fund has become nimbler, tracking company fundamentals and management quality more closely.
Performance
In the past year, the Axis ELSS Fund has delivered a return of 5 per cent, marginally ahead of the category average of 4 per cent—an early sign that the strategy tweaks may be paying off. However, when viewed over longer horizons, the underperformance remains evident. The fund has returned 18.3 per cent over five years and 13.22 per cent over ten years, trailing the category averages of 24.7 per cent and 14.8 per cent, respectively.
The fund had consistently ranked in the fourth quartile over the three-, five-, and ten-year periods. However, in the last one year, it has improved to the second quartile.
Notably, over the 15-year period, the fund continues to hold a first-quartile position.
While the recent improvement in short-term numbers is encouraging, Naik acknowledges that long-term performance will take time to heal. But he remains confident in the fund’s core strategy and evolving edge.
“For investors who’ve stayed the course, our long-term returns have been rewarding. With a wider research universe and a flexible portfolio framework, we’re better positioned to capture alpha across cycles,” Naik said.
With Rs 35,358 crore in assets under management, Axis ELSS is the largest player in the tax-saving category. Its turnaround is not just relevant—it matters to a large number of investors.
The last word
Axis ELSS Fund’s recent recovery signals a meaningful shift from its earlier struggles, driven by a more agile, diversified portfolio and sharper stock selection. Rather than depending on market tailwinds, the fund’s performance has improved on the back of deliberate strategic changes, especially broader sector exposure and a reduction in concentration risk.
While short-term performance has improved, a full turnaround in long-term metrics will take time. Those seeking ELSS options may find comfort in the proactive steps being taken, but a measured approach—backed by regular performance tracking—remains essential.
Also read: Surprise winner: Most popular fund category of May 2025
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