Ask Morningstar: Should I sell Axis Long Term Equity?

Jul 02, 2022

Could you share your views on Axis Mutual Fund? Axis Long Term Equity got a Silver rating. I invested based on that and I felt vindicated when it got all the fund awards. But what are your views now? I don’t know whether to sell or hold. I did check the website but the analysis is no longer available.

Axis Mutual Fund is currently conducting an internal investigation, which was started in February 2022 to evaluate potential irregularities relating two of their employees’ a fund manager and their chief trader. Both the employees have since been terminated (May 2022) whilst the investigation is still ongoing. We are keeping a close eye on the investigation and its findings. To this day, the firm has a clean regulatory record with a well-structured investment and risk management processes.

Although the fund house terminated the employment the two managers who have likely been associated with the irregularities, we think that it’s important to evaluate the irregularities in full detail once the results of the investigation become known. Considering the current situation, we think that it would not be appropriate to draw any conclusions and therefore adapt a wait and watch approach for now. We will also keep an eye on measures that Axis takes to prevent such issues from occurring in the future and ensure that investors’ interests remain protected.

To answer your question about whether to sell or hold the fund, we think that it’s important to wait until the full results of the investigation are known so that we can ascertain the cause and impact of the irregularity. For now, we don’t see any major impact on the funds and suggest that you don’t take any further action on these for now.

Registered readers can post their queries by accessing the Ask Morningstar tab. Our team will answer SELECT queries relating to mutual funds, portfolio planning and personal finance. While we provide broad guidelines, we suggest you consult a financial adviser before making investment decisions.


Articles authored by Kavitha Krishnan

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Jul 11 2022 02:27 PM
Morningstar research doesn't have the guts to express opinion frankly.
They act like "Chamchas" of various mutual funds. The research is
of poor quality & they 'compramise the the so called research' in order
to please the AMC!!!
Jul 7 2022 01:20 PM
Often wondered if only I found Morningstar research of substandard quality. Now I know others have same view.
sandeep deshmukh
Jul 5 2022 01:31 PM
strange that morning star has removed its own research without explanation. why do you not show conviction and tell readers that something has happended to axis fund that we praised. even when franklin funds exploded morning star was caught off guard and tackled the mess poorly. this is not expected from morning star.
Viswanath Nagarajan
Jul 4 2022 08:06 PM
Morningstar fund research leaves a lot to be desired. Lost count of the occasions when your work was found wanting. Every time an event occurs, you freeze into inaction. That displays ineptitude. Funds you assign high rankings to, are routinely in trouble. Is removing the research truly a solution? Brushing things under the carpet doesn't make problems disappear. Before this Q&A, did you bother to tell investors that there is trouble in Axis MF that you have assigned a high rank to and even given awards to? Was an explanation offered? Did you send a mailer? You have no idea how fund research works.
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