there is huge value in long term stock selection · 2019. 10. 30. · there is huge value in long...

There is huge value in long term stock selection

1 1 1

3.9 (14.5% CAGR)

10.2 (26.2% CAGR)

0.2 (-15.9% CAGR) 0

2

4

6

8

10

12

BSE 100 Index Top quartile Bottom quartile

(INR mn)

Investment (Dec 08)

Value after 10 years (Dec 18)

BSE 100 Index

Source: Bloomberg, Past performance may or may not be sustained in future. Data as on 31st Dec 2018

Source: Bloomberg, Past performance may or may not be sustained in future. Data as on Sep 19

Volatility : 360Day volatility 10 years back divided in 4 quartiles, Volatility : Beta value 10 years back divided in 4 quartiles.

High risk ≠ High Returns

-14.0%

-9.0%

-4.0%

1.0%

6.0%

11.0%

16.0%

Low volatility(Q1)

Moderatevolatility (Q2)

High volatility(Q3)

Very highvolatility (Q4)

Average 10 year return (CAGR)

Largecap (top 100)

Midcap (101 - 250)

Smallcap (251 onwards)

13% 12%

3%

-5%

Low Beta (Q1) Moderate Beta(Q2)

High Beta (Q3) Very high Beta(Q4)

Average 10 year return (CAGR)

High beta stocks have underperformed over long term Stocks with low volatility have outperformed over long term

Stock rally not backed by fundamentals is not sustainable

Source: Value Research, Past performance may or may not be sustained in future. Data as on Sep 19

5 year average EPS growth (%)

>25 15-25 5 to 15 <5

ROE (%) 5 year stock return CAGR (BSE 500 companies)

>25 30.7 20.5 10.5 -2.0

15-25 25.3 19.0 11.6 -1.2

5 to 15 9.2 15.7 6.3 1.5

<5 15.6 -1.4 -3.8 -9.8

Introducing : Axis Focused 25 Fund

Axis Mutual Fund 5

1

2

4

Pure bottom-up, best-ideas approach with high

active allocation relative to the benchmark while

maintaining prudent diversification

Active high conviction

investing strategy

Risk management

embedded in the investment

process

Note: Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the fund manager’s view of the equity markets

3

Concentrated focus on

sustainable businesses

Axis Focused 25 Fund - Relative Positioning

6

Active R

etu

rns

Active Risk

Index

funds

Large cap

diversified funds

Axis Focused

25 Fund

Mid cap

funds

Sector

Funds

Axis Mutual Fund

Fund focus

03

02

Aims for lower standard deviation

and beta with tight tracking error as

compared to the benchmark

Risk management focus

We typically avoid PSUs

What do we avoid

Compact portfolio with max 25

companies

Diversified across market cap

Portfolio focus

Target for companies that deliver

ROE / ROCE’s over the medium to

long term on a sustained basis

What do we look for

01

04


Portfolio Strategy – Designed for risk adjusted returns over market cycles

8

The manager looks at 3 broad buckets while constructing the portfolio.

50-60%

Core Portfolio

Steady compounders generating reasonable returns with low volatility

Horizon: Medium term (3-5 years).

20-25%

Focus on alpha

Companies having cyclical tailwind

Horizon: 18-24 months

20-25%

Emerging themes

Generating break-out growth going forward.

Horizon : Long term 5+ years


Axis Mutual Fund

Key Portfolio Characteristics

Axis Mutual Fund 9

Source : ValueFY, ACEMF.

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the fund manager’s view of the equity markets. Market Caps are based on SEBI AMFI guidelines on market capitalization. Past performance may or may not be sustained in the future. Stock(s) / Issuer(s)/ Top stocks with increased or decreased exposure mentioned above are for the purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as recommendation to buy/sell/ hold. The fund manager(s) may or may not choose to hold the stock mentioned, from time to time.

30th Sep 19

Portfolio Characteristics 30th Sep 19

No. of Stocks 24

Market Cap Mix Large cap – 75%

Midcap – 19%

Top 10 stocks (% of portfolio) 68%

Matched Portfolio 36%

Stocks outside Benchmark 11 stocks (36%)

Top 5 stocks outside benchmark Weight

Avenue Supermarts Limited 6.3%

Pidilite Industries Limited 6.0%

Supreme Industries Limited 5.0%

Gruh Finance Limited 4.1%

Info Edge (India) Limited 4.0%

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the fund manager’s view of the equity markets. Past performance may or may

not be sustained in the future. Sector(s) / Stock(s) / Issuer(s) mentioned above are for the purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as

recommendation. The fund manager(s) may or may not choose to hold the stock mentioned, from time to time. Investors are requested to consult their financial, tax and other advisors before

taking any investment decision(s).

Benchmark agnostic portfolio (30th Sep 2019)

10 Axis Mutual Fund

-10%

-3%

-3%

-3%

-2%

-1%

-1%

-1%

0%

1%

5%

6%

7%

Oil & Gas

Information Technology

Metal,Metal Products & Mining

Infrastructure & Power

Telecom

Autos & Logistics

Agro Inputs & Chemicals

Healthcare Services

Media & Publishing

Cement & Building Materials

Finance

Consumer

Capital Goods, Engineering & Construction

Sector Overweight/Underweight

Portfolio & Risk Parameters (30th Sep 19)

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the fund manager’s v iew of the equity markets. Past performance may or may not be sustained in

the future. Sector(s) / Stock(s) / Issuer(s) mentioned above are for the purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as recommendation. The fund manager(s) may or may not

choose to hold the stock mentioned, from time to time. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s).

11 Axis Mutual Fund

Past performance may or may not be sustained in future. Data as on 30th Sep 2019. Beta is a measure of the volatility, or systematic risk, of a portfolio compared to the market(benchmark).

Tracking error is a measure of the deviation from the benchmark. It is calculated as the standard deviation of the difference between the portfolio and benchmark returns.

The fund aims for lower beta with tight tracking error

Axis Mutual Fund 12

0.9

0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19

Beta

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19

Tracking Error

Please refer to the annexure for the performancee of other schemes managed by the fund manager

13

SIP Performance – 30th Sep 2019

14

Above investment simulation is for illustration purpose only and should not be construed as a promise on minimum returns and safeguard of capital. Above calculation is based on Regular Plan - Growth Option NAV.

Assuming Rs. 10,000 invested systematically on the first business day of every month over a period of time. Past performance may or may not be sustained in future. Returns greater than 1 year period are

compounded annualized. SIP returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return). The performance given above is for Other than Direct Plan

unless specified.

Axis Mutual Fund

Annexure

15

Annexure

16

Product Labelling

Fund Name Riskometer Product Labelling

Axis Focused 25 Fund (An open ended equity scheme investing in

maximum 25 stocks investing in large cap, mid cap

and small cap companies.)

This product is suitable for investors who are seeking*

• Capital appreciation over long term

• Investment in a concentrated portfolio of equity &

equity related instruments of up to 25 companies

Axis Long Term Equity Fund (An open ended equity linked saving scheme with a

statutory lock in of 3 years and tax benefit)


• Capital appreciation & generating income over long

term

• Investment in a diversified portfolio predominantly

consisting of equity and equity related instruments.


• Capital appreciation over long term

• Investment in a diversified portfolio of equity and

equity related instruments of midcap companies

Axis Emerging Opportunities Fund –

Series 1 & 2 (1400 Days) (A Close ended equity fund)

17 Axis Mutual Fund

Statutory Details and Risk Factors

18

Data updated as on 30th Sep 2019

Disclaimer: Past performance may or may not be sustained in the future. Sector(s) / Stock(s) / Issuer(s) mentioned above are for the

purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as recommendation. The fund manager(s) may or may

not choose to hold the stock mentioned, from time to time.

Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd.

(liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the

AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision.

Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates

shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No

representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The

AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

Thank you

there is huge value in long term stock selection · 2019. 10. 30. · there is huge value in long...

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