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Axis Focused 25: Concentrated Large Cap
Tue, Nov 15, 2016
Source : Yash Jashnani, Citrus Interactive

Axis Focused 25 Fund is an open ended large cap equity diversified fund. The primary objective of the scheme is to generate long term capital appreciation by investing in a concentrated portfolio of equity & equity related instruments of up to 25 companies. The fund has an AUM of Rs. 605 Crore as on 30th September 2016 which has increased by Rs. 290 Crore compared to last year as on 30th September 2015.

 

 

Performance


The fund’s performance across various time horizons is extremely good as seen in the table given below. It has beaten its benchmark in all the time periods. It has also beaten the category average in all the time periods except in the 3 Years period.

 

Scheme Name

YTD

6 Months

1 Year

3 Years

Since Inception

Axis Focused 25 Fund

15.15

16.88

14.43

19.41

17.64

 NIFTY 50

8.7

10.08

5.71

12.28

12.03

Category Average

13.62

16.86

13.19

25.13

NA

Rank

53/151

69/154

63/151

98/137

NA

 

Figures are in % as on 30th October 2016; Returns above 1 year in Compounded Annual Growth Rate (CAGR)

 

In terms of the calendar year returns the fund has beaten its benchmark in all time periods except in 2013. It has generated higher returns than the equity diversified category in 2013 and 2015 but has underperformed in 2014 compared to its category average as shown in the table below.

 

Scheme Name

2013

2014

2015

Axis Focused 25 Fund

5.82

38.75

3.91

 NIFTY 50

6.76

31.39

-4.06

Category Average

5.44

54.29

3.83

Rank

70/136

113/138

65/147

All figures in %; The fund’s data is available from 2013 onwards

 

Risk: In terms of standard deviation (measured over the last 3 years) the fund has taken equal risk as compared to its category median and in terms of Beta (measured over the last 3 years), the risk taken by the fund is higher as compared to the category median.

 

 

 

Standard Deviation

Beta

Axis Focused 25 Fund

0.93

0.92

Category Median

0.93

0.9

 

 

Risk-Adjusted Return: In terms of Treynor (measured over the last 3 years) the fund has proved lower risk-adjusted returns than the category median and in terms of Sharpe ratio (measured over the last 3 years), the fund has proved equal risk-adjusted returns as compared to the category median.

 

 

 

Treynor

Sharpe

Axis Focused 25 Fund

0.08

0.08

Category Median

0.93

0.08


 

Portfolio Category:

Sector concentration: The fund’s concentration in the top 3, 5 and 10 sectors is higher than the category median.

 

 

Top 3

Top 5

Top 10

Axis Focused 25 Fund

36.84

48.14

69.88

Category Median

34.18

45.86

64.91

All figures in % as on 30th September 2016

 

Company concentration: The fund’s Concentration in the Top 3, 5 and 10 companies is higher than the category median.

 

 

Top 3

Top 5

Top 10

Axis Focused 25 Fund

19.57

31.17

53.83

Category Median

16.59

24.21

40.4

All figures in % as on 30th September 2016

 

Sector and Company Concentration signifies that the funds maintain a relatively concentrated portfolio.

 

Number of Equity Holdings: The Fund currently holds 24 stocks in its portfolio (30th September 2016), which is lower than the median stock count of the equity diversified category, which currently stands at 46. In the last 5 years the equity holding averages to 24.

 

Cash Equivalent:        

Its cash equivalent for September was 3.12 per cent. The average cash allocation for the last five years is 2.28 per cent. Its maximum allocation to cash over the last two years is 4.32 percent in August 2016 and lowest was -0.23 percent in January 2014. In 2016 it had an average cash allocation of 1.91 per cent.

 

Portfolio Characteristics


The top 5 sectors include Bank-Private, Finance-NBFC, Pharmaceuticals & Drugs, Cement & Construction Materials and Auto Ancillary.

In the last 6 months the fund has bought Castrol India Ltd., Cholamandalam Investment & Finance Company Ltd., Info Edge (India) Ltd., Ipca Laboratories Ltd., Maruti Suzuki India Ltd., Nestle India Ltd., Pidilite Industries Ltd., Quess Corp Ltd. and RBL Bank Ltd.

Stocks of DCB Bank Ltd., Dish TV India Ltd., Gateway Distriparks Ltd., Hero MotoCorp Ltd., Hindustan Zinc Ltd., Infosys Ltd., Jubilant FoodWorks Ltd. Tata Motors Ltd. and Thermax Ltd. have been dropped from its portfolio and stock of Housing Development Finance Corporation Ltd. - (HDFCW2) has been bought and sold from the portfolio.

 

Process

The scheme would invest 65-100% in Equity & Equity Related Securities of not exceeding 25 companies of which 90-100% would be invested in companies among the top 200 in terms of market capitalization The scheme would also invest 0-25% in Debt and Money Market Securities.

 

 Investment in Securitized debt (excluding foreign securitized debt), if undertaken, would not exceed 20% of the net assets of the Scheme.

 

In order to have a concentrated portfolio, the scheme will follow a bottom up stock selection approach.

The portfolio will be built utilising a bottom-up stock selection process, focusing on appreciation potential of individual stocks from a fundamental perspective.

 

 

Fund Manager

 

Sudhanshu Asthana

 

Mr. Sudhanshu Asthana has been a Fund Manager of Equity at Axis Asset Management Company Limited since April 1, 2011. He previously served as an Assistant Fund Manager at the firm from August 17, 2009 till March 31, 2011. Prior to this, he served as a Fund Manager of Equity at Barclays Wealth India Pvt. Limited from October 2008 to August 2009. Prior to that, Mr. Asthana was a Fund Manager of Equity at SBI Funds Management Pvt. Limited from July 2007 to October 2008. He has extensive experience as an equity fund manager.


Mr. Asthana also manages Axis Triple Advantage Fund and Axis Mid Cap Fund.


Mr. Asthana holds a Diploma in Investment Management and Finance from Narsee Monjee Institute of Management Studies in 1999. He earned an MA in Economics from the University of Mumbai in 1998. He has also earned a BA in Economics from Mithibai College in 1996.

 

Jinesh Gopani

Mr. Jinesh Gopani has been a Fund Manager of Equity at Axis Asset Management Company Limited since April 1, 2011. Mr. Gopani previously served as an Assistant Fund Manager of Equity at the Axis Asset Management Company Limited from October 21, 2009 to March 31, 2011. He has a total experience of 13 years in the capital markets of which four years are in equity fund management.


Mr. Gopani serves as Fund Manager of various funds in Axis Mutual Fund complex. He serves as Assistant Fund Manager of Equity at Axis Mutual Fund - Axis Long Term Equity Fund, Axis Mutual Fund - Axis Midcap Fund, Axis Mutual Fund - Axis Hybrid Fund - Series 1, and Axis Mutual Fund - Axis Hybrid Fund Series 2.


Mr. Gopani holds a degree in M.M.S. in Finance from Mumbai University in 2001. He has also earned a B.Com. Degree.

 

Our View

 

The fund has had a good track record in terms of beating its benchmark and category average. The risk is higher than other diversified funds as the fund maintains a concentrated portfolio. It can be considered for the large cap allocation for your portfolio.

 

 
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