Axis All Seasons

Debt Fund of Funds(An open-ended fund of funds scheme

investing in debt oriented mutual fund

schemes)

Different segments of the fixed income market perform at different times

Data as of 30th September 2020. Source: AMFI, Axis MF Internal Analysis. Past performance may or may not be sustained in future. This is for illustration purpose only. 2

Segment Duration Credit Short Term Dynamic Ultra Short Term

Proxy IndexNIFTY 10 yr Benchmark

G-Sec Index

NIFTY Credit Risk Bond

Index

NIFTY Short Duration

Debt Index

NIFTY Composite Debt

Index

NIFTY Ultra Short

Duration Debt Index

CY 11 2.9% 9.1% 8.7% 5.7% 9.7%

CY 12 10.8% 11.5% 10.7% 11.1% 10.1%

CY 13 -0.8% 8.8% 8.0% 4.1% 9.4%

CY 14 14.6% 11.9% 10.5% 14.0% 9.5%

CY 15 7.3% 9.7% 8.5% 8.1% 8.6%

CY 16 15.1% 10.6% 9.3% 12.2% 8.1%

CY 17 0.3% 7.5% 6.4% 4.5% 6.9%

CY 18 6.1% 6.7% 6.6% 5.7% 8.0%

CY 19 9.5% 9.2% 9.1% 10.7% 7.4%

CYTD 20* 8.5% 7.8% 7.6% 9.0% 4.5%

Single Tax Incidence

Tax incidence graphic used for illustrative purposes only. Frequency of tax incidence depends on the number of exits made during an investment period or distributions received from the fund. Please consult your tax advisor for all issues related to taxation. Axis AMC or its employees do not offer tax advice to any of its investors or prospective investors.

Direct Investing V/s Fund of Fund

Why FoF for Debt Investing

• Retail investors often find debt

markets nuances complex

• An FoF is a professionally

managed solution for debt

allocations

• Hassle free debt portfolio actively

managing allocations between

credit and duration

• Strict limits and process driven

approach to weed out personal

biases

• Single incidence of taxation as

illustrated alongside

3

Fund

of Funds

Direct

Investing

Fund

A

Fund

B

Fund

C

Fund

A

Fund

D

Fund

D

Tax

Incidence 1

Tax

Incidence 2

Tax

Incidence 3

Tax

Incidence 4

Best

Performing

Debt Class

Year

0

Year

1

Year

2

Year

3

Year

4

Year

5

Ultra Short Long GILT Credit Risk Ultra Short Dynamic Dynamic

Fund of

Funds

Navigating Dynamic Market Opportunities – Direct Investing V/s FoF

Source: Axis AMC Internal Analysis. Period: March 2012 to Sep 2020. Sample Fund: Open ended Medium Term Bond Fund considered. 4

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

0

20

40

60

80

100

120

Mar-12 Aug-13 Jan-15 Jun-16 Nov-17 Apr-19 Sep-20

In Y

ea

rs

% o

f N

et A

sse

ts

Illustration: Asset Mix to actively manage various cycles

Exposure to High Quality Assets (LHS) Modified Duration (RHS)

Favorable credit cycle to

capture the widened

corporate bond spreads

Turnaround of credit cycle, slowing

inflation and improving macros used

to increase the portfolio level duration

predominantly via G-Sec exposure

Improved corporate profitability and

credit environment used to shift to

lower rated corporate bonds reduced

maturity.

Reducing the reaction time

Idea Generation to Execution – The FoF Edge

The Chain of Decision Making

Fund Manager

IdeaCommunication Investor

DecisionExecution

A FoF structure allows the fund manager to action strategies rapidly by

eliminating the chain and capturing opportunities before its too late.

Fund Manager Idea ExecutionFaster reaction to

market opportunities

5

6

• Better diversification benefits/ Reduced

single manager risk in case of credit

events.

• The fund can benefit from expertise of

multiple fund management teams.

• Portfolio remains highly liquid at all

times

• Cap on Single AMC exposure

Axis, 35.96%

ICICI, 23.40%Kotak, 4.93%

L&T, 12.68%

HDFC, 17.51%

SBI, 4.61%

Aditya Birla, 7.23%

Benefits of a Multi AMC FoF

Better risk management Current AMC Wise Exposure

Source: Axis AMC Internal Research. Data as on as on 30th November 2020. For complete details of funds mentioned refer www.axismf.com

How does a Fund of Fund work?

% Weight YTM % Mod Duration Avg Maturity

Long Bond Strategies

Axis Dynamic Bond Fund 12.69% 6.41% 6.20 8.90

L&T Triple Ace Bond Fund 12.68% 6.28% 5.58 7.71

Aditya Birla SL Income Fund 7.23% 6.36% 5.58 8.11

ICICI Prudential Gilt Fund 6.44% 6.02% 7.66 12.80

Short Bond Strategies

ICICI Prudential Short Term 4.96% 5.11% 2.41 3.50

Kotak Bond Short Term Plan 4.93% 4.77% 2.38 2.98

Axis Treasury Advantage Fund 4.24% 3.90% 0.86 0.96

ICICI Prudential Savings Fund 3.19% 4.36% 0.89 2.10

Credit Strategies

HDFC Credit Risk Debt Fund 11.00% 8.55% 2.09 2.62

Axis Credit Risk Fund 11.79% 7.77% 1.50 2.10

ICICI Prudential Credit Risk Fund 8.82% 7.85% 2.09 2.75

SBI Credit Risk Fund 4.06% 7.07% 2.46 3.15

Fund Level Quants 6.38% 3.44 Years 4.95 Years

Source: Axis AMC Internal Research. Data as on as on 30th November 2020. .The above numbers are based on current portfolio allocation of the fund and figures of other funds are based on publicly available information sourced through third party aggregators. For complete details of funds mentioned visit the fund pages of the respective mutual fund or AMFI. Axis AMC does not guarantee the accuracy of the data mentioned above. 7

Illustration: Bringing it All Together

Summary - Advantages of FoFs

8

A fund of fund structure can provide a better way to create a balanced portfolio with

the oversight of a specialist fund manager.

01

02

03

04

Fund managers may find portfolio rebalancing tougher given high impact costs.

Investor allocations to duration tend to be return chasing/ backward looking.

Challenges in taking corrective action in case of credit event (either at manager

or investor level).

Taxation impact in case of rebalancing by investors.

9

A balanced “all-season” debt strategy for long term investors

• Allocate dynamically across duration and credit strategies.

• Benefit from risk diversification by allocating across multiple funds.

Investment Objective

To generate optimal return over the medium term by investing primarily in debt oriented mutual funds.

Investment approach

Prudent Credit Risk

Management

Dynamic Duration

Management

Axis All Seasons Debt FoF

Up to 50% allocation*Minimum 50% allocation*

High Quality Corp Bond/

G-sec fundsCredit Funds

• Dynamically managed to target overall duration for the fund.

• Predominantly allocate to funds with clearly defined duration mandate.

• Can selectively allocate to dynamic bond/G-sec funds to target long duration.

• Allocation in up to 3-4 funds.

• Ongoing monitoring for any developing credit issues.

Axis All Seasons Debt FoF – Fund Allocation

*The above portfolio allocation would be based on prevailing market conditions and would be subject to changes depending on the fund managers views. Please refer SID for detailed asset allocation and investment strategy.. 10

Criteria for selecting funds

11

Strategy followed is based on the current market conditions and is subject to changes depending on the fund manager’s view of the markets.Please refer to Scheme Information Document (SID) for detailed asset allocation and investment strategy.

Predominantly from top 10 AMCsWill look beyond top 10 AMCs

based of the overall fund strategy

requirements

Consistent long term

performance track recordQuality of the portfolio

Fund manager history Well sized fund

01 02

03 04

05 06

Fund of Fund compared to single funds

The fund of fund structure allows for greater diversification through larger number of issuers & lower allocation per issuer

Duration*(Average of

Category)

Credit*(Average of

Category)

Fund of

Fund

No. of Issuers

Top 10 Issuers

Weightage (%)

# Issuers AA+

and Below

21 27 230

61% 62% 46%

3 18 94

Source: Axis AMC Internal Research. Data as on 30th November, 2020. Portfolio’s of multiple funds aggregated in proportion. *Duration: All Short Term Fund as per SEBI Scheme Categorization with SOV, AAA, Cash allocation above 80%. Credit: All Credit Risk Fund as per SEBI Scheme Categorization.

Higher Diversification, Lower Issuer Risk

Portfolio Granularity

Largest Exposure to single

corporate issuer 3.6%

Top 10 holdings ex-GOI – 24%

Unique Sectors – 17

Max high yield Credit funds

exposure – 50%

12

Significant Steepness in Yield Curve – Push for Longer Maturity Portfolios

3.62 3.683.80

4.51

5.35

6.53

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

3 M 6 M 1 Year 3 Year 5 Year 10 Year

Scope for Normalization - Steepness in AAA Curve

3.75

4.25

4.75

5.25

5.75

6.25

6.75

Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20

RBI Has Cut Repo Rates to Decadal Lows

Tactical reallocation in favour of long corporate bond strategies to take advantage of the likely compression of yields

Source: Bloomberg, RBI. Data as of 30th November 2020

Current investment strategy is subject to change on the basis of the Fund managers discretion taking into account the macro economic conditions and the fund

manager view on the markets.13

Current Investment Strategy

Current PortfolioAs of November 30th 2020

14

Source: Axis AMC Internal Research.

Portfolio’s of multiple funds aggregated in proportion of holding as on date. For complete portfolio details refer monthly portfolio disclosures available on the website. The yield to maturity given above is based on the portfolio of funds as on date given above. This should not be taken as an indication of the returns that may be generated by the fund and the securities bought by the fund may or may not be held till their respective maturities. The calculations are based on the invested corpus. Composite portfolio details are basis published portfolios of individual AMCs. The above strategies are based on internal assessment of current strategies in the underlying funds.

Fund Facts

15

Name

Axis

All Seasons

Debt Fund

of Funds

Category

A Debt

Fund of Fund

scheme

Fund Manager

Mr. R.

Sivakumar

Minimum

Application

Rs. 5,000 and

in multiples

of Rs. 1/-

thereafter

Benchmark

NIFTY

Composite Debt

Index

Exit Load

Upto 10% of

units Nil

Beyond 10%

units -1% for

1 year

Statutory Details and Risk Factors

16

Data updated as on 30th November 2020

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 disclosureof 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.

Regulatory Disclosure: Investors will be bearing the recurring expenses of the scheme in addition to the expenses of other schemes in which Fund of Fundsscheme makes investment.

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 ` 1Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liableor responsible for any loss or shortfall resulting from the operation of the scheme. This document represents the views of Axis Asset Management Co. Ltd. andmust not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management CompanyLimited, 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 containedherein. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reservesthe right to make modifications and alterations to this statement as may be required from time to time.

Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s). The material should not be construed asissued by Government of India or any of its authority.

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

Thank You