EQUITY

J A N U A R Y 2 0 2 1

11.9% 14.9% 7.8%

Nifty 50 - Last 5 years Nifty 50 - Last 1 year Nifty 50 - MTD (CAGR) (Absolute) (Absolute)

QUICK TAKE Equity market valuations are broadly reasonable We remain bullish on equities Investors are suggested to have their adjusted for the cyclical low in earnings and from a medium to long term asset allocation plan based on one’s risk potential for revival going forward. perspective. appetite and future goals in life.

KEY HIGHLIGHTS

MARKETS Markets continued their stellar run this month as positive news like housing in select pockets where demand up until now had flow and liquidity continued to drive markets higher. S&P BSE been lacklustre. With chances of vaccination improving in the Sensex & NIFTY 50 ended the month, up 8% each. NIFTY Midcap near term, beaten down sectors like hospitality, travel & retail 100 & NIFTY Smallcap 100 were down 6% & up 8% respectively. have seen a revival in the markets as participants have begun For the calendar year, the NIFTY 50 was up 15%, NIFTY Midcap factoring the high economic multiplier effects of these industries. 100 was up 22% while NIFTY Smallcap 100 was up 21%. The best Our portfolio stance has a distinct quality bias as we believe these performing sectors included healthcare, Information technology companies are ideally suited to benefit from gaps left by weaker & Consumer durables. On the losing side PSU banks, utilities & incumbents and capture growth opportunities. In line with the media stocks were prime losers. recovery theme as the economy returns to a mid-to-high growth Retail CPI inflation moderated to 6.93% as against 7.61% in environment, several domestic cyclicals are likely to be CORPORATE October amid favourable base effects and weaker momentum. beneficiaries of the new growth cycle. The last 2 years have seen a Food inflation moderated to 9.4% (11% in October) led by lower large degree of cost optimizations and deleveraging play out and pace of price increases across food items. The moderation in should further add a material fillip to growth stories in the post headline CPI inflation is a positive given that inflation has Covid environment. remained well above the RBI’s upper limit of 6% for the past eight There has been a large re-rating in a relatively short span of time months. Arrival of the winter crop along with easing of disruptions and hence caution is warranted. This has been fuelled by Covid should soften food prices further and would bode well for the cases/fears coming down, economic activity sharply bouncing overall inflation trajectory. back to pre-Covid levels, positive news flow on vaccines, strong November GST collections were supported by normalization of Q2 earnings led by cost management and global QE/weak USD economic activity accompanied by festive demand along with support which has resulted in massive FPI inflows into India. GLOBAL improved compliance associated with recent system changes and Continued liquidity could keep the market levels elevated but drive against GST evaders and fake bills. Total GST collections liquidity is a tough variable to model. Globally, India remains in stood at Rs 1.15 lakh Cr for November compared to Rs 1.05 Lakh sync with the rest of the world and hence a global liquidity remains Cr in October. a key risk to current valuations. High frequency economic data has confirmed the recovery trend While we anticipate volatility in the near term, this volatility is with incoming data for November continuing to show growth on a best served by staying invested rather than trying to time the YoY basis. One of the key reasons for this revival is the successful markets. The longer term outlook for equities continues to remain transmission of lower interest rates to the economy championed intact. Short term volatility can be used by investors to top up by the RBI. Lower rates have started to show its impact on sectors their existing investments with a 3 to 5-year view. Top 10 Stocks (By Holding) % AXIS BLUECHIP FUND (as on 31st December 2020)

• The fund focuses on delivering superior risk adjusted returns. The fund manager HDFC Bank Limited 9.7 targets out-performance to the benchmark while delivering risk that is lower than the benchmark. • Stocks are selected in the portfolio based on their ability to grow earnings on a Bajaj Finance Limited 9.6 sustainable basis from a medium term perspective while maintaining a highly liquid and risk managed portfolio. The expected earnings growth of the portfolio is higher than that of the benchmark NIFTY 50 TRI. Infosys Limited 8.9 • The strategy is to invest mainly in companies which operate in a secular growth segment and has leading market share in their areas of operation to provide steady returns and the remaining in companies that are gaining markets share due to Kotak Mahindra Bank Limited 7.5 differentiated offering or cost advantage, in large sectors expected to deliver alpha. • The portfolio retains a distinct large cap bias with current mid-cap exposure limited to around 20%. For its midcap allocations, the portfolio looks to keep a high hurdle in Tata Consultancy Services Limited 6.3 terms of quality and growth potential.

ICICI Bank Limited 6.1 Top 5 Sectors (as on 31st December 2020)

42.2% Reliance Industries Limited 5.7 23.2% 7.5% 6.9% Avenue Supermarts Limited 5.5 5.7%

Housing Development Finance 4.7 Corporation Limited Finance Consumer Agro Inputs Information Oil & Gas & Chemical Technology Maruti Suzuki India Limited 3.3 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.

AXIS LONG TERM EQUITY FUND Top 10 Stocks (By Holding) % (An open-ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit) (as on 31st December 2020)

• The fund is focused on quality companies having strong long term earnings growth Bajaj Finance Limited 9.3 prospects. Thus the fund maintains a stable core portfolio with relatively low churn. Within that objective, the fund is comfortable looking past shorter term volatility in performance. HDFC Bank Limited 7.4 • With a medium to long term view towards capturing growth, the fund is biased towards stocks which can deliver superior returns. This includes private sector banks Tata Consultancy Services Limited 7.2 and NBFCs, autos and ancillary, housing & consumption sectors. • Normally, the fund has avoided highly cyclical stories and highly regulated sectors. The fund looks at opportunities across the market cap and the portfolio remains Kotak Mahindra Bank Limited 6.7 balanced between its large and mid-cap allocations. Avenue Supermarts Limited 6.7

Info Edge (India) Limited 6.4 Top 5 Sectors (as on 31st December 2020)

40.0% Housing Development Finance 5.8 23.6% Corporation Limited 8.5% 7.2% 6.9% Nestle India Limited 5.5

Maruti Suzuki India Limited 5.2 Finance Consumer Healthcare Information Autos & Technology Logistics Pidilite Industries Limited 4.4 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. Top 10 Stocks (By Holding) % AXIS MIDCAP FUND (as on 31st December 2020)

• The fund focuses on investing in bottom-up stocks that provide potential to grow Cholamandalam Investment 4.5 cash flows over the medium term. The portfolio seeks to add businesses with and Finance Company Limited economic moats and distinct competitive advantage.

• The fund remains true-to-label in its portfolio allocations with a diversified and risk- PI Industries Limited 4.0 managed mid-cap portfolio which has a superior liquidity profile.

Voltas Limited 3.7

IPCA Laboratories Limited 3.6

Astral Poly Technik Limited 3.5

Top 5 Sectors (as on 31st December 2020) Bajaj Finance Limited 3.4

39.1% 23.1% 13.3% HDFC Bank Limited 3.2 5.2% 4.9% Avenue Supermarts Limited 3.1

Endurance Technologies Limited 3.0 Finance Consumer Healthcare Oil & Gas Agro Inputs & Chemical

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the Tata Consumer Products Limited 3.0 fund manager’s view of the equity markets.

Top 10 Stocks (By Holding) % AXIS FOCUSED 25 FUND (as on 31st December 2020)

• The fund manager runs a high conviction portfolio, containing the fund manager’s Bajaj Finance Limited 9.7 best ideas and invests in up to 25 stocks while ensuring reasonable diversification and focus on quality and risk management. Tata Consultancy Services Limited 8.8 • The fund manager looks at 3 broad buckets while constructing the portfolio. The core portfolio consists of steady compounders that can generate reasonable returns with Kotak Mahindra Bank Limited 8.0 low volatility. The alpha and emerging themes buckets consist of companies having a cyclical tailwind and emerging themes with high growth potential. We have rejigged our portfolio over the last few months as we look forward to the new cycle. The Housing Development Finance 7.4 emphasis is on quality and growth with a 3-5-year view. Corporation Limited

Reliance Industries Limited 6.9

Top 5 Sectors (as on 31st December 2020) HDFC Bank Limited 6.9 30.9% 23.7% 11.7% Avenue Supermarts Limited 6.4 8.8% 8.0% Info Edge (India) Limited 5.6

Finance Consumer Healthcare Information Agro Inputs Maruti Suzuki India Limited 5.4 Technology & Chemical

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the Pidilite Industries Limited 5.1 fund manager’s view of the equity markets. Top 10 Stocks (By Holding) % AXIS MULTICAP FUND (as on 31st December 2020)

• Good ideas can do better irrespective of its sector/theme/size. Bajaj Finance Limited 9.7 • Axis Multicap Fund seeks to invest across the market cap spectrum in high conviction ideas with improved risk- adjusted return characteristics. The fund manager looks for stocks that are expected to report faster growth relative to the benchmark. Infosys Limited 9.0 • The fund as such is sector agnostic and focuses on a bottom up approach to invest in stocks that are at an inflection point such as market share gain, industry HDFC Bank Limited 8.9 consolidation, sunrise industries, improved management focus and capital allocation or regulatory & policy changes. Kotak Mahindra Bank Limited 7.5

Tata Consultancy Services Limited 5.8

Avenue Supermarts Limited 5.8 Top 5 Sectors (as on 31st December 2020)

44.6% ICICI Bank Limited 4.6 21.5% 7.5% 7.3% 5.6% Reliance Industries Limited 3.7

Housing Development Finance 3.1 Corporation Limited Finance Consumer Agro Inputs Information Healthcare & Chemical Techanology

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the Divi's Laboratories Limited 3.0 fund manager’s view of the equity markets.

Top 10 Stocks (By Holding) % AXIS SMALL CAP FUND (as on 31st December 2020)

• Axis Smallcap fund aims to invest primarily in high conviction small cap stocks. The Galaxy Surfactants Limited 6.0 bottom up approach to investing seeks to identify long term businesses keeping in mind risk and reward by containing mistakes and navigating volatile stock movements. Brigade Enterprises Limited 4.4

• Investing in small caps is not for the faint hearted. Key to successful investing is Tata Elxsi Limited 3.7 patience and ability to withstand short term volatility. Furthermore, small caps are a broader universe as compared to large & midcaps and hence the need for keeping in mind the opportunities in this space come with higher Can Fin Homes Limited 3.6 degree of risk as compared to their larger counterparts.

City Union Bank Limited 3.6

Fine Organic Industries Limited 3.4 Top 5 Sectors (as on 31st December 2020)

25.7% Mas Financial Services Limited 3.1 19.0% 14.3% 13.9% 7.9% JK Cement Limited 3.0

Narayana Hrudayalaya Limited 3.0 Finance Telecom Agro Inputs Healthcare Consumer & Chemical Blue Star Limited 3.0 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. Top 10 Stocks (By Holding) % AXIS GROWTH OPPORTUNITIES FUND (as on 31st December 2020)

• Diversification is key to long term portfolio management. Indian equities currently Bajaj Finance Limited 6.9 account for just 3% of the total global market cap of the world. Axis Growth Opportunities Fund offers investors a unique opportunity to take exposure of global equities through a structured allocation by way of an open ended mutual fund. Sundaram Finance Limited 5.7 • The fund aims to invest 70% in domestic equities through a bottom up approach while the rest will be invested in global large caps. Overall the fund will maintain a compact portfolio of high conviction domestic and international companies hence Info Edge (India) Limited 4.9 offering investors a tax efficient yet unique investment proposition for portfolio diversification. PI Industries Limited 4.0

Torrent Power Limited 3.8

Astral Poly Technik Limited 3.7 Top 5 Sectors (as on 31st December 2020)

30.4% Kotak Mahindra Bank Limited 3.3 28.9% 14.6% 5.5% Supreme Industries Limited 3.1 4.2%

Coforge Limited 3.1

Finance Consumer Healthcare Oil & Gas Agro Inputs & Chemical The Indian Hotels Company Limited 2.9 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.

Top 10 Stocks (By Holding) % AXIS ESG EQUITY FUND (as on 31st December 2020)

• Environmental, social change and regulatory response to them are happening faster Bajaj Finance Limited 10.0 than ever and poses sizeable challenges for businesses. However, many businesses remain focused on hard financial cost/benefit analysis while ignoring intangible costs like their carbon footprint or waste emissions. Avenue Supermarts Limited 9.1

• The fund aims to invest 70% in domestic equities through a bottom up approach with Kotak Mahindra Bank Limited 7.9 an emphasis on ESG compliance while the rest will be invested in global ESG compliant largecaps. Overall the fund will maintain a compact portfolio of high conviction domestic and international companies hence offering investors a tax Tata Consultancy Services Limited 7.4 efficient yet unique investment proposition for portfolio diversification. HDFC Bank Limited 6.9

Info Edge (India) Limited 5.6 Top 5 Sectors (as on 31st December 2020)

39.1% Housing Development Finance 4.5 36.0% Corporation Limited 8.4% 7.4% 4.2% Nestle India Limited 4.2

Hindustan Unilever Limited 4.1 Finance Consumer Agro Inputs Information Healthcare & Chemical Techanology Wipro Limited 4.0 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. AT A GLANCE

(Data as on 31st December, 2020)

Axis Bluechip Axis Focused 25 Axis Long Term Axis Multicap Axis Midcap Fund Axis Small Cap Axis Growth Axis ESG Equity Scheme Fund Fund Equity Fund* Fund Fund Opportunities Fund Names Fund

Category Large Cap Fund Focused Fund ELSS Multicap Fund Mid Cap Fund Small Cap Fund Large & Mid Cap Thematic Fund Fund Strategy Focused on high High conviction Investing in Investing in Invest in high Invest in high Multicap portfolio Investing in quality best ideas companies with breadth of quality mid caps quality small caps with upto 35% in companies with established portfolio across secular long term opportunities with long term with long term global large cap sustainable businesses and core, cyclical and growth outlook available across horizon horizon stocks growth prospects industry leaders emerging themes and superior the market cap using an ESG governmance spectrum matrix practices

Inception Date 5-Jan-10 29-Jun-12 29-Dec-09 20-Nov-17 18-Feb-11 29-Nov-13 22-Oct-18 12-Feb-20

S&P BSE Mid Nifty Smallcap NIFTY Large Benchmark Nifty 50 TRI Nifty 50 TRI S&P BSE 200 TRI Nifty 500 TRI Nifty 100 TRI Cap TRI 100 TRI Midcap 250 TRI

AUM (Crs.) 22,517.33 14,357.95 27,180.98 7,450.83 8,514.60 3,631.90 2,067.10 1,959.41

Top Ten Holdings (%) 61.5% 64.7% 60.4% 57.3% 33.2% 36.7% 43.1% 65.3%

Allocation

Large Cap 98.5% 94.3% 84.0% 91.7% 24.2% - 54.1% 94.1%

Mid Cap - 4.3% 13.5% 5.5% 71.7% 25.5% 37.9% 3.6%

Small Cap - - 1.5% 0.9% 1.7% 68.2% 3.7% -

Debt, Cash & Cash Equivalents 1.5% 1.4% 1.0% 2.0% 2.5% 6.3% 4.3% 2.4% Top 5 Sectors Finance: Finance: Finance: Finance: Finance: Finance: Finance: Finance: 42.2% 30.9% 40% 44.6% 39.1% 25.7% 30.4% 39.1% Consumer: Consumer: Consumer: Consumer: Consumer: Telecom: Consumer: Consumer: 23.2% 23.7% 23.6% 21.5% 23.1% 19% 28.9% 36%

Agro Inputs & Healthcare: Healthcare: Agro Inputs & Healthcare: Agro Inputs & Healthcare: Agro Inputs & Chemical: 11.7% 8.5% Chemical: 13.3% Chemical: 14.6% Chemical: 7.5% 7.5% 14.3% 8.4%

Information Information Information Information Oil & Gas: Healthcare: Oil & Gas: Information Technology: Technology: Technology: Technology: 5.2% 13.9% 5.5% Technology: 6.9% 8.8% 7.2% 7.3% 7.4%

Oil & Gas: Agro Inputs & Autos & Logistics: Healthcare: Agro Inputs & Consumer: Agro Inputs & Healthcare: 5.7% Chemical: 6.9% 5.6% Chemical: 7.9% Chemical: 4.2% 8% 4.9% 4.2%

Exit Load If redeemed / switched-out within 12 If redeemed / switched-out within 12 months from the date of allotment: months from the date of allotment: • For 10% of investments: NIL • For 10% of investments: NIL • For remaining investments: 1% • For remaining investments: 1% NIL • If redeemed / switched-out after 12 months from the date of allotment: NIL • If redeemed / switched-out after 12 months from the date of allotment: NIL

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. 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. *An open-ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit. Please refer SID for exact asset allocation. AXIS BLUECHIP FUND AXIS LONG TERM EQUITY FUND (An open-ended equity scheme predominantly Moderately (An open-ended equity linked saving scheme with Moderately Moderate Moderate investing in large cap stocks) High a statutory lock in of 3 years and tax benefit) High Low to This product is suitable for investors who are Low to This product is suitable for investors who are Moderate High Moderate High seeking*: seeking*: • Capital appreciation over long term. • Capital appreciation & generating income • Investment in a diversified portfolio Low Very High over long term. Low Very High predominantly consisting of equity and • Investment in a diversified portfolio equity related instruments of large cap RISKOMETER predominantly consisting of equity and RISKOMETER companies. equity related instruments. Investors understand that their principal *Investors should consult their financial advisers if in Investors understand that their principal *Investors should consult their financial advisers if in will be at very high risk will be at very high risk doubt about whether the product is suitable for them. doubt about whether the product is suitable for them.

AXIS MIDCAP FUND AXIS FOCUSED 25 FUND (An open-ended equity scheme predominantly Moderately (An open-ended equity scheme investing in Moderately Moderate Moderate investing in mid cap stocks) High maximum 25 stocks investing in large cap, mid High Low to cap and small cap companies) Low to This product is suitable for investors who are Moderate High Moderate High seeking*: This product is suitable for investors who are • Capital appreciation over long term. seeking*: • Investing predominantly in equity & equity Low Very High • Capital appreciation over long term. Low Very High related instruments of mid cap companies. • Investment in a concentrated portfolio of *Investors should consult their financial advisers if in RISKOMETER equity & equity related instruments of up to RISKOMETER doubt about whether the product is suitable for them. 25 companies. Investors understand that their principal Investors understand that their principal will be at very high risk *Investors should consult their financial advisers if in will be at very high risk doubt about whether the product is suitable for them.

AXIS MULTICAP FUND AXIS GROWTH (An open-ended equity scheme investing Moderately Moderately Moderate OPPORTUNITIES FUND (An Open- Moderate across large cap, mid cap, small cap stocks) High ended Equity Scheme investing in both large cap High Low to Low to This product is suitable for investors who are Moderate High and mid cap stocks) Moderate High seeking*: This product is suitable for investors who are • Capital appreciation over medium to long seeking*: term. Low Very High • Capital appreciation over long term. Low Very High • Investment in a diversified portfolio • Investment in a diversified portfolio consisting of equity and equity related RISKOMETER predominantly consisting of equity and RISKOMETER instruments across market capitalization. equity related instruments both in India as Investors understand that their principal well as overseas. Investors understand that their principal *Investors should consult their financial advisers if in will be at very high risk will be at very high risk doubt about whether the product is suitable for them. *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. AXIS SMALL CAP FUND AXIS ESG EQUITY FUND (An open ended equity scheme predominantly (An Open ended equity scheme investing in Moderately Moderately investing in small cap stocks) Moderate companies demonstrating sustainable Moderate High High practices across Environment, Social and This product is suitable for investors who are Low to Low to seeking*: Moderate High Governance (ESG) theme) Moderate High • Capital appreciation over long term. This product is suitable for investors who are seeking*: • Investment in a diversified portfolio Low Very High Low Very High predominantly consisting of equity and • Capital appreciation over long term.

equity related instruments of small cap RISKOMETER • Investments in companies demonstrating RISKOMETER companies. sustainable practices across Environment, *Investors should consult their financial advisers if in Investors understand that their principal Social and Governance (ESG) parameters. Investors understand that their principal doubt about whether the product is suitable for them. will be at very high risk *Investors should consult their financial advisers if in will be at very high risk doubt about whether the product is suitable for them.

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Data as on 31st December 2020. Source of data: Bloomberg, ACEMF 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. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s). This document should not be construed as research report. Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Ltd. (liability restricted to ` 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. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.