For Scheme related details and riskometer of BOI AXA Flexi Cap Fund, please refer page no. 8 Facts in Figures June 2021 Monthly fund analysis and market reviews INDEX Page No. MARKET UPDATE ...........................................................................................................................................3 BOI AXA Large & Mid Cap Equity Fund.....................................................................................................................4 BOI AXA Tax Advantage Fund ..................................................................................................................................5 BOI AXA Manufacturing & Infrastructure Fund .......................................................................................................6 BOI AXA Small Cap Fund .........................................................................................................................................7 BOI AXA Flexi Cap Fund...........................................................................................................................................8 BOI AXA Bluechip Fund...........................................................................................................................................9 BOI AXA Mid & Small Cap Equity & Debt Fund .......................................................................................................10 BOI AXA Equity Debt Rebalancer Fund..................................................................................................................11 BOI AXA Conservative Hybrid Fund.......................................................................................................................12 BOI AXA Arbitrage Fund........................................................................................................................................13 BOI AXA Credit Risk Fund ......................................................................................................................................14 BOI AXA Short Term Income Fund.........................................................................................................................15 BOI AXA Ultra Short Duration Fund.......................................................................................................................16 BOI AXA Liquid Fund .............................................................................................................................................17 BOI AXA Overnight Fund.......................................................................................................................................18 IDCW History...............................................................................................................................................19 Fund - Manager wise Scheme Performance...................................................................................................20 Schemes managed by Fund Manager............................................................................................................27 SIP Returns of selected Schemes...................................................................................................................28 Month End Total Expense Ratio ....................................................................................................................29 How to read Factsheet .................................................................................................................................30 Disclaimer/Statutory Details........................................................................................................................31 BOI AXA Mutual Fund Branches - Investor Service Centers (ISC's) ...................................................................31 Alok Singh MARKET UPDATE CHIEF INVESTMENT OFFICER The first quarter of FY 2021-22 witnessed the surge in COVID-19 cases. This second wave adversely impacted economic activity in the country in the first half of the financial quarter. Thankfully situation got under control towards the latter half of the financial quarter. The Government decision of not imposing strict nationwide lockdown and allowing industrial activities to continue helped in avoiding any sharp decline in economic activity as seen in the first COVID-19 wave. The Market manufacturing Purchasing Managers Index (PMI) moderated to 50.8 in May’21 from 55.5 in April’21. Yet, it remained in the expansion zone in May’21 before falling in to the contraction zone at 48.1 in June’21. Core infrastructure industries’ output grew by 16.8% YoY in May’21 but slowed from a 60.9% YoY growth in April’21. On MoM basis, core infrastructure industries’ output was down by 3.7% MoM after declining by 12.4% MoM in April’21. The COVID-19 related restriction and supply side disruptions continued to impact inflation. Consumer Price Index (CPI) inflation is likely to rise to 6.5% in June’21 from 6.3% in May’21 on a seasonal pick-up in food prices. Food & beverage inflation is likely to rise to 5.99% in June’21 from 5.24% in May’21, led by higher vegetable prices. Core CPI inflation is likely to moderate slightly to 6.41% from 6.55% in May’21 on the back of a decline in gold and silver prices. We also expect some of the issues around data availability and supply chain bottlenecks to be resolved with a gradual opening up of the economy in June’21, leading to some correction in prices in categories such as Household Goods & Services and Recreation & Amusement. Rising petrol and diesel prices may continue to put upward pressure on Transport and Communication inflation and thus core inflation. Wholesale Price Index (WPI) inflation is likely to moderate slightly to 12.42% in June’21 from 12.94% in May’21. However, WPI core inflation may rise from 10.58% in May’21 to 10.88% in June’21, led by continued rise in industrial commodity prices. Despite the recent rise in inflation, we believe that the Reserve Bank of India (RBI) will ‘look through’ this current bout of inflation due to supply-side pressures and limited data availability. As Dr. Michael Patra noted in the June’21 post policy press conference “the view of the Monetary Policy Committee (MPC) is that at this time the inflation is not persistent. Inflation will turn persistent when it is backed by demand pull. At the current stage, we find demand very weak and there is no demand pull in the inflation formation, it is mostly on the supply side, and therefore, we have chosen to look through. But we are very, very vigilant about demand pressures. And, we will keep on monitoring as and when demand pressures start feeding into the inflationary process.” However, if CPI inflation persists above 6% for an extended period, the RBI may be forced to change stance. Taking cue from RBI stance on inflation yields in the fixed income market traded in a narrow range. RBI also engaged in active yield curve management, this also guided the fixed income market. Market also got support from the fact the Government of India continued to keep fiscal deficit under reasonable control despite impact on revenue due to COVID-19 situation. Fiscal deficit in 2MFY22 was at 8.2% of FY2022BE. Gross tax collections for 2MFY21 increased by 148% with direct taxes and indirect taxes witnessing increase of 127% and 164%, respectively. Among direct taxes, corporate taxes increased by 156% while income taxes increased by 111%. Among indirect taxes, GST increased by 138%, excise duty increased by 237%, and customs duty increased by 216%. However, expenditure contracted 6.6% with revenue expenditure contracting 9.1% and capital expenditure increasing 14%. Exports in June 2021 increased by 47% to US$32.5 bn over June 2020 (30% over June 2019) and by 0.6% over May 2021 (May: US$32.3 bn). Over June 2019, non-oil exports increased 27%. Imports increased 96% to US$41.9 bn over June 2020 (2% over June 2019), and by 8.6% over May 2021. Over June 2019, non-oil exports increased 4.5%. Trade deficit in June 2021 widened to US$9.4 bn (US$6.3 bn in May). The Nifty-50 companies reported strong earnings growth primarily driven by lower base (due to national lockdown towards end of Mar'20) and margin improvement. EBITDA margin (excluding financials, commodity, telco & Tata motors) improved YoY from 21.4% to 22.6% due to tighter cost control, operating leverage (despite commodity inflation). Reported earnings were ahead of market expectation mainly driven by commodity sector (both metals & energy). Excluding commodities and other volatile stocks, Nifty-50 profit growth was at 9.1%, which was 4.3% behind our expectation. The earnings season gone by saw Nifty-50 FY22/23 earnings estimate upgraded by 4.7%/3.9% primarily driven by metals. However, the risk of lockdowns and impact on economy thereof continues to persist. The current macro-economic condition of the Indian economy appears to be stable. The Global factors like US Federal Reserve’s next move, the strength of Dollar and Oil prices may have impact on the future course of the Indian Market. However with policy momentum and increase in pace of vaccination along with accommodative RBI stance and growth in exports should continue to support Indian financial markets. Other indicators like valuation and sentiment indicators are neutral. No indicator is currently outright negative. The future risk may arise if COVID-19 cases continue to remerge. Data Source: Bloomberg/ Internal Research 3 SIP SHIELD AVAILABLE Equity Fund Hybrid Fund Debt Fund Risk-o-meter