Performance review: Axis Focused 25 Fund
Axis Focused 25 Fund is a focussed multi-cap fund that seeks to generate long-term capital appreciation by investing in a concentrated portfolio of equity and related instruments. They invest in up to 25 companies that are primarily from the top 200 in terms of market capitalisation.
Asset Allocation
|
Asset Class
|
Axis Focused 25 (%)
|
Category (%)
|
|
Large-Cap
|
88.97
|
65.31
|
|
Mid-Cap
|
5.95
|
17.54
|
|
Small-Cap
|
-
|
9.73
|
As we can see, this fund is large-cap biased with almost 89 per cent dedicated towards large-cap as compared to 65 per cent of the category average. Having said that, its assets under management (AUM) is quite high at 11,372 crore as on August 31, 2020 and hence, it is okay to be large-cap biased. When your assets are high, dedicating a high portion to mid-cap and small-cap may hamper liquidity. Hence, having a large-cap bias is fine. However, in the case of Axis Focused 25, it is quite high.
Performance
As this article is intended towards the performance review of the said fund, let us just get straight into it. Let us first have a look at the fund’s performance on a trailing basis.
|
Trailing Returns (in per cent)
|
|
Particulars
|
YTD
|
1-Year
|
3-Years
|
5-Years
|
7-Years
|
|
Axis Focused 25 Fund
|
-3.54
|
9.73
|
5.38
|
11.24
|
14.70
|
|
S&P BSE 200 TRI
|
-3.72
|
3.25
|
3.18
|
7.81
|
12.81
|
|
Category Average
|
-2.59
|
8.28
|
2.18
|
7.58
|
13.65
|
On a trailing basis, this fund has performed well, where apart from year-till-date (YTD), it has outperformed S&P BSE 200 Total Returns Index (TRI) and its category average. To have a deep insight, let us gauge this fund based on its rolling returns as compared to S&P BSE 200 TRI.
|
Average Rolling Returns (in per cent)
|
|
29-Jun-12 to 18-Aug-20
|
1-Year
|
3-Years
|
5-Years
|
|
Axis Focused 25 Fund
|
15.13
|
15.40
|
15.48
|
|
S&P BSE 200 TRI
|
11.33
|
11.21
|
11.31
|
As we can see, in terms of average rolling returns, it successfully outperformed S&P BSE 200 TRI in all possible rolling periods. If we look at its return distribution in a three-year and five-year rolling period, then 85 per cent of the time, it gave returns between 10 per cent and 20 per cent. This shows the consistency of funds.
Simply in terms of performance, the Axis Focused 25 Fund has done well. However, in terms of risk, it is indeed quite risky. Being a focussed fund, it has a concentrated portfolio with almost 65 per cent of the assets in the top 10 holdings. Even on the sectoral front, 59 per cent of the assets are in the top three sectors. So, even if the good calls of such funds may help you in getting handsome returns initially, it can hamper the returns if one call goes wrong, and hence, you should be wary of this before investing.