EQUITY M AY 2 0 2 1 13.2% 48.4% -0.4% 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 Equity markets saw yet another volatile month driven by news Markets have entered a period of consolidation over the past few flow and policy action. The broader markets continued to weeks as they digest earnings and news flow. While the global outperform frontline stocks driven by high quality mid and small picture is positive, in India the key aspect to monitor is the peak of caps finding favour with investors. Frontline benchmarks, S&P the second wave and the progress of the vaccination drive. From a BSE Sensex & NIFTY 50 ended the month down 1.5% & 0.4% valuations standpoint, the beta normalization is likely to give way respectively. NIFTY Midcap 100 registered a gain of 2.1% while to fundamentals based long term growth. To that effect earnings NIFTY Smallcap 100 rose 5.6%. After a strong start to the year, so far have brought valuations to long term averages. India has lagged its global peers over the last few months Our portfolio companies today encompass a cross section of understandably so on account of the Covid news irking foreign growth ideas ideally suited to benefit from gaps left by weaker investors. MSCI India underperformed MSCI EM by 3.4%. CORPORATE incumbents and capture growth opportunities. In line with the The prime focus over the last month has been the rapid recovery theme as the economy returns to a mid-to-high growth resurgence of Covid across the country. Stark pictures and news environment, several domestic cyclicals are likely to be flow has dampened the mood across all walks of life including beneficiaries of the new growth cycle. The core portion of our financial markets. Many states have put in place lockdowns across portfolio consists of companies that emphasise quality which we affected areas and governments have had to contend with hard continue to hold on to. The hallmark of our investment philosophy questions on the Covid game plan. While the vaccination program is the endeavour to identify consistent long term growth and our has been opened to the 18-44 age group, we believe supply of portfolios are positioned accordingly. vaccines will remain a key bottleneck. As always, investors must use market dips to aggressively GLOBAL Earnings over the last quarter have confirmed a strong participate in the India growth story. The longer term outlook for resurgence in economic activity in the last quarter. Cyclical stories equities continues to remain intact. Short term volatility can be across banks, materials and auto have been strong. Sectors like IT used by investors to top up their existing investments with a 3 to and the healthcare space have also witnessed growth on expected 5-year view lines. Management commentary has been key. With a return of state wise lockdowns, we expect the June quarter earnings to be lacklustre. Top 10 Stocks (By Holding) % AXIS BLUECHIP FUND (as on 30th April 2021) • The fund focuses on delivering superior risk adjusted returns. The fund manager Infosys Limited 9.4 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 9.0 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. HDFC Bank Limited 9.0 • 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 Tata Consultancy Services Limited 7.3 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 Kotak Mahindra Bank Limited 7.1 terms of quality and growth potential. ICICI Bank Limited 7.1 Top 5 Sectors (as on 30th April 2021) 39.9% Avenue Supermarts Limited 5.6 18.2% 16.1% 6.7% Housing Development Finance 5.0 4.9% Corporation Limited Reliance Industries Limited 4.4 Finance Information Consumer Healthcare Oil & Gas Technology Divi's Laboratories Limited 3.2 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 30th April 2021) • The fund is focused on quality companies having strong long term earnings growth Bajaj Finance Limited 9.6 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. Tata Consultancy Services Limited 7.5 • 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 Info Edge (India) Limited 7.0 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 Avenue Supermarts Limited 6.9 balanced between its large and mid-cap allocations. Kotak Mahindra Bank Limited 6.8 HDFC Bank Limited 5.8 Top 5 Sectors (as on 30th April 2021) 36.0% Housing Development Finance 5.2 19.0% Corporation Limited 18.5% 9.0% 6.6% Nestle India Limited 5.0 Divi's Laboratories Limited 5.0 Finance Information Consumer Autos & Healthcare Technology Logistics Pidilite Industries Limited 4.2 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 30th April 2021) • The fund focuses on investing in bottom-up stocks that provide potential to grow Cholamandalam Investment and 5.7 cash flows over the medium term. The portfolio seeks to add businesses with Finance Company Limited economic moats and distinct competitive advantage. • The fund remains true-to-label in its portfolio allocations with a diversified and risk- Voltas Limited 3.7 managed mid-cap portfolio which has a superior liquidity profile. PI Industries Limited 3.6 Bajaj Finance Limited 3.5 Astral Poly Technik Limited 3.4 Top 5 Sectors (as on 30th April 2021) ICICI Bank Limited 3.3 22.4% 14.6% 13.9% HDFC Bank Limited 2.9 13.4% 8.3% Supreme Industries Limited 2.8 Avenue Supermarts Limited 2.8 Finance Consumer Information Capital Goods, Agro Inputs Technology Eng. & & Chemical Construction Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the IPCA Laboratories Limited 2.7 fund manager’s view of the equity markets. Top 10 Stocks (By Holding) % AXIS FOCUSED 25 FUND (as on 30th April 2021) • The fund manager runs a high conviction portfolio, containing the fund manager’s Bajaj Finance Limited 9.4 best ideas and invests in up to 25 stocks while ensuring reasonable diversification and focus on quality and risk management. Kotak Mahindra Bank 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 Tata Consultancy Services Limited 8.4 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 Avenue Supermarts Limited 6.9 emphasis is on quality and growth with a 3-5-year view. Info Edge (India) Limited 6.4 Housing Development Finance 6.3 Top 5 Sectors (as on 30th April 2021) Corporation Limited 34.9% 20.9% 12.0% HDFC Bank Limited 5.8 8.1% 7.9% Divi's Laboratories Limited 5.6 Finance Information Consumer Capital Goods, Autos & Pidilite Industries Limited 5.2 Technology Eng. & Logistics Construction Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the Supreme Industries Limited 5.1 fund manager’s view of the equity markets. Top 10 Stocks (By Holding) % AXIS FLEXI CAP FUND (as on 30th April 2021) • Good ideas can do better irrespective of its sector/theme/size. Bajaj Finance Limited 9.1 • 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 8.1 • 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 7.5 consolidation, sunrise industries, improved management focus and capital allocation or regulatory & policy changes.