what are blue chips?...various business segments within the company proven business models •market...
TRANSCRIPT
What are blue chips?
2
Top 100 companies as per market cap
• Established businesses with long track record
• Offering diversification via various business segments within the company
Proven business models
• Market leaders in terms of market share, size, penetration
• Typically have strong corporate-governance practices
Local dominance
• Generating significant revenue from global markets
Global presence
Blue chips have generated wealth for their investors over a long term
Why invest in blue chips?
3
Stable returns
High liquidity
Well researched
universe
High stability and visibility of business
Low marginal
cost due to high scale operations
Competitive advantage due to high
capital efficiency
Large caps cover 70-
75% of total market cap of all listed companies
Large caps offer stable returns
4
Source: Bloomberg, Past performance may or may not be sustained in future. Data for last 15 years. Data as on 31st Mar 2019. Large: Nifty 50 TRI, Mid: Nifty Midcap 100 TRI, Small: Nifty Smallcap 100 TRI
-55% -61% -72%
-6% -13% -17% 0% -1% -8%
18% 21% 21% 13% 16% 13% 12% 15% 12%
101%
161% 166%
51% 52% 68%
26% 27% 29%
Large Mid Small Large Mid Small Large Mid Small
1 year return 3 year return 5 year return
Minimum
Average
Maximum
With less volatility & drawdowns
5
Source: Bloomberg, Past performance may or may not be sustained in future. Data for last 15 years. Data as on 31st Mar 2019. Large: Nifty 50 TRI, Mid: Nifty Midcap 100 TRI, Small: Nifty Smallcap 100 TRI
-14% -14%
-22% -21%
-26% -26%
-32%
-40% -40%
1 year 3 year 5 year
Maximum Drawdown
Large
Mid
Small17%
18%
18%
17%
18% 18%
18%
19% 19%
1 year 3 year 5 year
Average volatility
Large
Mid
Small
Large caps provide cushion during tough market conditions
6
Source: Bloomberg, Past performance may or may not be sustained in future. Data for last 15 years. Data as on 31st Mar 2019. Large: Nifty 50 TRI, Mid: Nifty Midcap 100 TRI, Small: Nifty Smallcap 100 TRI
50%
-52%
53%
4% 14%
9%
58%
-61%
73%
-1%
30%
-12%
77%
-72%
79%
-4%
30%
-25%
Jul 04 - Jan 08 Jan 08 - Dec 08 Dec 08 - Sep 10 Sep 10 - Mar 14 Mar 14 - Jan 18 Jan 18 - Mar 19
Rising market Falling market Rising market Flat market Rising market Volatile Market
Returns in different market conditions
Large Mid Small
However, blindly investing in large caps wont help
7
Variation in top and bottom stocks over the last 10 years
% CAGR (CY 08-18)
BSE 100 index 14.5
Top quartile 26.2
Bottom quartile (15.9)
Our strategy relies on bottom up selection of quality companies that can deliver sustainable growth
Source: Bloomberg, Past performance may or may not be sustained in future. Data as on 31st Dec 2018
Weak companies have
destroyed significant
investor wealth
There is a high dispersion in long term stock performance
There is value in quality investing
8
Axis Approach
Strong business
model
Good ROE’s
and cash flows
Secular growth rate
of the sector
(around 1.5 to 2x of
GDP)
Strong corporate
governance/
promoter
pedigree
Focus on…
.. and be good risk managers
Axis Bluechip Fund: Positioning
9
1
2
3
Large cap companies (80-100%) with other companies (0-20%)
The Scheme will invest predominantly in Equity and
Equity Related Instruments of Large Cap companies.
Risk management embedded in the investment process
Relatively liquid portfolio
Targets volatility below benchmark (Nifty)
Pure bottom up stock picking
focusing on fundamentals
Maintains a core portfolio of quality businesses
with secular growth prospects
Takes tactical positions in quality cyclicals linked
to fund manager views of cyclical factors and
market positioning
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. Market caps are defined as per SEBI regulations
as below: a. Large Cap: 1st -100th company in terms of full market capitalization. b. Mid Cap: 101st -250th company in terms of full market capitalization. c. Small Cap: 251st company onwards in terms of full market
capitalization.
Large cap biased : Minimum 80% in large caps
10
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. Market caps are defined as per SEBI regulations
as below: a. Large Cap: 1st -100th company in terms of full market capitalization. b. Mid Cap: 101st -250th company in terms of full market capitalization. c. Small Cap: 251st company onwards in terms of full market
capitalization.
Average Large Cap exposure
over 2 years: 83%
Large Cap
86%
88%
90%
92%
94%
96%
98%
100%
Sep-17 Mar-18 Sep-18 Mar-19 Sep-19
Large Cap Midcap Small Cap
Mid Cap
Large Cap
Average Large Cap exposure over 2
years: 84%
Current Investment Focus
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~ 60% leaders
Companies which operate in secular growth segment and has leading market share in their areas of operation.
~ 40% Challengers
Companies that are gaining markets share due to differentiated offering or cost advantage, in large sectors.
Expected to
deliver
alpha
Expected
to provide
steady
returns
The investment focus of the fund is subject to change on the discretion of the fund manager. The investment strategy of the fund will be in line with the strategy laid out in the scheme information document. For
complete details on the scheme investment strategy refer the scheme information document.
The fund does not compromise on quality of the portfolio
12
The investment focus of the fund is subject to change on the discretion of the fund manager. The investment strategy of the fund will be in line with the strategy laid out in the scheme information document. For complete details on the scheme investment strategy refer the scheme information document. Above numbers are calculated based on the portfolio as on 30th Sep 2019. Please note that above numbers are calculated for the equity portion of the portfolio. ROE: Return on Equity, EPS : Earnings per share.
15.0%
13.8%
Axis Bluechip Fund NIFTY 50 TRI Index (Benchmark)
ROE (%) - FY 19
19.3%
13.1%
Axis Bluechip Fund NIFTY 50 TRI Index (Benchmark)
EPS Growth (FY 19)
Current Portfolio & Risk Parameters (30th Sep 19)
*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. 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).
13
Sector-wise positioning (30th Sep 19)
14
Source IISL, Axis MF Research The benchmark for the scheme is NIFTY 50. 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).
-6.0%
-5.2%
-3.0%
-2.8%
-1.4%
-1.1%
-1.0%
-0.7%
-0.4%
-0.3%
0.0%
2.2%
5.1%
7.4%
Oil & Gas
Autos & Logistics
Metal,Metal Products & Mining
Infrastructure & Power
Capital Goods, Engineering & Construction
Healthcare Services
Telecom
Agro Inputs & Chemicals
Information Technology
Media & Publishing
Cement & Building Materials
Others
Finance
Consumer
Sector Overweight/Underweight
The fund has aimed to run lower than market risk while generating positive risk adjusted returns
0.85
0.87
0.89
0.91
0.93
0.95
0.97
0.99
Ja
n-1
7
Apr-
17
Ju
l-1
7
Oct-
17
Ja
n-1
8
Apr-
18
Ju
l-1
8
Oct-
18
Ja
n-1
9
Apr-
19
Ju
l-1
9
Beta
15
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). Volatility is the extent to which a fund's net asset value typically fluctuates (shown in terms of annualized standard deviation), Sharpe ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk. It is defined as the difference between the returns of the investment and the risk-free return, divided by the standard deviation of the investment. All ratios are calculated based on daily returns over a 3 year period at any given point in time.
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Ja
n-1
7
Apr-
17
Ju
l-1
7
Oct-
17
Ja
n-1
8
Apr-
18
Ju
l-1
8
Oct-
18
Ja
n-1
9
Apr-
19
Ju
l-1
9
Sharpe Ratio
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
Ja
n-1
7
Ap
r-1
7
Ju
l-1
7
Oct-
17
Ja
n-1
8
Ap
r-1
8
Ju
l-1
8
Oct-
18
Ja
n-1
9
Ap
r-1
9
Ju
l-1
9
Volatility
Volatility (Axis Bluechip Fund -Growth)
Volatility (Nifty 50 TRI Index)
Our approach has helped us curb drawdowns relative to the benchmark
16
Past performance may or may not be sustained in future. Data as on 30th Aug 2019. A drawdown is a peak-to-trough decline during a specific period for an investment.
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
Drawdown
Axis Equity Fund - Growth Nifty 50 TRI IndexAxis Bluechip Fund - Growth
17
Please refer to the Annexure for returns of all the schemes managed by him.
SIP Performance as on 30th Sep 2019
18
Axis Bluechip Fund – Growth (Inception: 5th Jan 2010)
SIP Investments Since Inception SIP 5 Year SIP 3 Year SIP 1 Year SIP
Total Amount Invested 1,160,000 600,000 360,000 120,000
Market value as on September 30, 2019 2,356,048 847,815 457,000 134,447
Returns (Annualised) 14.08% 13.81% 16.15% 23.14%
Benchmark Returns (Annualised) 11.01% 9.88% 9.38% 7.06%
Additional Benchmark Returns (Annualised) 11.50% 10.90% 11.28% 8.92%
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. Benchmark: Nifty 50 TRI. Additional Benchmak: S&P BSE Sensex TRI. Inception Date: Jan
05, 2010. This scheme is managed by Shreyash Devalkar. Please refer to the Annexure for returns of all the schemes managed by him. 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.
Annexure
19
20
Product Labelling
Fund Name Riskometer Product Labelling
Axis Bluechip Fund
(An open ended equity scheme predominantly
investing in large cap stocks)
This product is suitable for investors who are seeking*
• Capital appreciation over long term
• Investment in a diversified portfolio predominantly
consisting of equity and equity related instruments
of large cap companies
Axis Multicap Fund
(An open ended equity scheme investing across
large cap, mid cap, small cap stocks)
This product is suitable for investors who are seeking*
• Capital appreciation over medium to long term
• Investment in a diversified portfolio consisting of
equity and equity related instruments across market
capitalization.
This product is suitable for investors who are seeking*
• Capital appreciation over long term
• Investing predominantly in equity & equity related
instruments of Mid Cap companies.
Axis Midcap Fund
(An open ended equity scheme predominantly
investing in Mid Cap stocks)
Axis Equity Advantage Fund Sr 1 & 2
(A Close Ended Equity Scheme)
This product is suitable for investors who are seeking*
• Capital appreciation over medium to long term
• Investment in a diversified portfolio of
predominantly equity and equity related instruments
across market cap while managing risk through
active hedging strategies
21 *Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Statutory Details and Risk Factors
22
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