Axis Mutual Fund Introduces Axis Value Fund

Sep 02, 2021

Axis Mutual Fund (MF) has launched an open-ended equity scheme - Axis Value Fund.

The scheme endeavors to follow a value investment strategy.

Accordingly, the investment objective of the scheme is to generate consistent long-term capital appreciation by investing predominantly in equity and equity related securities by following value investing strategy. However, there can be no assurance that the investment objective of the Scheme will be achieved.

Under normal circumstances, 80% to 100% of the fund’s portfolio will be invested in equity & equity related instruments. The scheme may also invest upto 20% of its assets in Debt & Money Market Instruments, and may seek to invest upto 10% of its net assets in Units issued by REITs and InvITs.

The investment strategy of Axis Value Fund as mentioned in the Scheme Information Document (SID) is as follows:

Axis Value Fund aims to provide long term capital growth by investing in a diversified portfolio of companies that are selected using attributes of value investing.

The approach of value investing is to identify stocks which trade at valuations lower than the overall market, their own historical average valuations or relative to their fundamental valuations. Stocks that trade at lower valuations have the potential to provide appreciation in the future.

However, value investing needs to keep in mind the risk of value traps – that is stocks that appear optically cheap but are not really so since the cheap valuation is backed by poor fundamentals.

Hence Axis Value Fund’s strategy would be to select value stocks while making sure that they have sound business models.

Some of the scenarios where a company becomes a value opportunity may include:

- company maintains competitive advantages, and have temporarily fallen out of favor for reasons that are considered non-recurring or short-term;

- whose value is not currently well known;

- whose value is not fully recognized by the public.

While identifying value stocks, Axis Value Fund will focus on companies that maintain strong balance sheets and have experienced management.

Some of the measures that Axis Value Fund can use to look at the valuation of a company to determine whether it qualifies as a value stock may include:

  • present value of discounted projected cash flows;
  • price-to-earnings ratio
  • price-to-book ratio; and
  • price-to-sales ratio.

Axis Value Fund’s performance will be benchmarked against S&P BSE 200 TRI (Total Return Index).

Axis Value Fund will be managed by Mr Jinesh Gopani and Mr Hitesh Das.

The NFO opens for subscription on September 02, 2021, and closes on September 16, 2021. The scheme will reopen for continuous sale and repurchase within five Business Days froms the date of allotment.

The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.

The fund offers Regular Plan and Direct Plan having Growth Option and Income Distribution cum Capital Withdrawal Option (Re-investment and Pay-out facility).