Axis Long Term Equity Fund has slipped to a four-star rating in the last few months after retaining a five-star rating since launch. It witnessed a slowdown in performance in 2016 but has recovered in 2017. The fund's investment strategy focuses on buying quality growth stocks. While selecting stocks, the fund looks for superior and scalable businesses, a high return on capital and secular growth.

Axis Long Term Equity Fund is large-cap oriented as compared to its peers. In the last one year, large-cap weights have been at 65 to 75 per cent and mid-caps at 25 to 30 per cent, with marginal small-cap positions. Consistent performance has led to the fund seeing its asset size burgeon from a mere Rs 4 crore at launch to Rs 16,108 crore by December 2017. However, the multi-cap mandate allows it leeway to manage this through large-cap exposures. While the three year returns are slightly below that of the category, the fund's one year returns are about 1 percentage point higher and five year returns 3 percentage points more than the category returns.

Axis Long Term Equity Fund, being a later entrant, managed to skip the bear market of 2008 and thus hasn't really been tested in a severe market meltdown. Its performance in 2011, however, showed an ability to contain losses in a falling market. It has delivered convincing outperformance of both its benchmark and peers in most bull years - be it 2010, 2013 or 2014.

A good multi-cap option if you like to own quality businesses.