AXIS Multicap Fund: A great beginning for a promising diversified fund

Axis Multi Cap Fund

The Axis Multicap Fund was launched in December 2021 and has a current AUM of Rs 4874.75 Cr as on 31^st January 2024. The TER (Total Expense Ratio) of the Growth option of the fund was Rs 1.90% as on 29^th February 2024. The benchmark for the fund is the Nifty 500 Multicap 50:25:25 TRI. The Fund is managed by Mr. Nitin Arora, Mr. Shreyas Dewalkar, Mr. Hitesh Das, and Mr. Sachin Jain.

A lumpsum of Rs 1 lakh invested at the inception of the fund would have grown to nearly Rs 1.4 lakhs as on 29^th February 2024 giving a return of 17.64%.

Even though this is just the 2^nd year since the fund started, the 1 year returns from the fund for the CY is 46.20% against the Benchmark return of 39.28% and Category average return of 43.74% (Returns as on 6^th March 2024).

Source: Advisorkhoj Research

SIP Returns

A monthly SIP of Rs 10,000/- started at inception of the Axis Multicap Fund (Regular Growth) would have grown to Rs 3.73 lakhs against total SIP investment of Rs 2.70 Lakhs. The fund has given around 30% XIRR return. The same SIP amount, if invested in the benchmark would have accumulated a corpus of Rs 3.72 Lakhs in the same period (Returns as on 29^th February 2024).

Source: Advisorkhoj Research as on 29^th Feb 2024

Multicap Funds

Multicap Funds are equity funds with a diversified portfolio holding stocks across market capitalization. In its circular dated 11^th September 2020, SEBI had mandated that Multi Cap Funds should hold at least 25% of their assets in the stocks of each of the three market caps — Large, Small and Midcap. The rest of the assets could be invested in any of the asset classes as per the fund managers’ strategy.

Investment Strategy of the Axis Multicap Fund

The scheme invests in equity and equity related securities across market capitalization using a bottom-up stock selection process, focusing on appreciation potential of individual stocks from a fundamental perspective. The objective of the scheme is to invest in equity and related securities with a view to earn long term capital appreciation. The fund managers invest in a mix of companies having the mature growth of large cap, the stable growth of low debt companies & Mid & small cap high growth niche businesses to approach markets using a Multicap strategy.

The Axis Multicap fund utilizes larger, more diversified portfolios to deliver alpha. The Fund diversified their portfolios from concentrated holdings to a broader number in the last one year, which has led to a wider exposure across sectors. The fund will aspire to capture potential opportunities throughout the lifecycle of the company’s progression from small cap all the way to large cap. Through this approach the fund will aim to achieve a quality focused long-term portfolio with an improved risk reward profile and controlling fund volatility typically faced during fund rebalancing. (Source Axis MF Scheme Information Document)

Portfolio Allocation

(Source: Axis MF Scheme Information Document as on 31^st Jan 2024)

Why invest in Multi Cap funds?

• Diversification: Since Multi Cap Funds hold stocks from all the market capitalization, it helps the investors in getting an exposure to the different sizes of companies and reap the growth potential from each segment. Apart from this, investors get to invest in a portfolio that also has different Industry sectors featured in it.


• Winners rotate across market cap segments: A diversified portfolio of Large, Mid and Small cap stocks may reduce downside risks and give you superior returns in the long-term investment horizon.
  
  

  

  Source: National Stock Exchange, Advisorkhoj Research; Period: 01.01.2015 to 29.02.2024. Disclaimer: Past performance may or may be sustained in the future



• Winners rotate across sectors: Like market cap segments, winners also keep rotating across industry sectors (see the chart below). Some sectors may outperform in some quarters or years, and others may outperform in other quarters or years. Multi Cap funds diversify across industry sectors and can change sector allocations (within the purview of the SEBI mandate for Multi Cap funds) based on a top down or bottoms up approach depending on the strategy of the fund manager.

Who should invest in the Axis Multicap Fund?

• Investors looking for capital appreciation over long-term investment horizon.


• Investors who are looking for a one-stop solution with disciplined exposure to Large, Mid and Small Caps as a part of their asset allocation.


• Investors who have high to very high-risk appetites.


• Investors who have minimum 5 years investment tenures.

Investors should consult with their mutual fund distributors or financial advisors if Axis Multicap Fund is suitable for their investment needs.