Equity Market Outlook - Axis Mutual Fund

3 downloads 190 Views 762KB Size Report
EQUITY. OUTLOOK. MAY 2016. Quick take. -4.1%. Nifty 50 - Last 1 year. Key highlights. 1.4%. Nifty 50 - MTD. • Equity m
EQUITY OUTLOOK MAY 2016

6.4%

-4.1

Nifty 50 - Last 5 years

1.4

%

Nifty 50 - Last 1 year

%

Nifty 50 - MTD

Quick take •

Equity market valuations are broadly reasonable.



We remain bullish on equities from a medium to long term perspective.



Investors are suggested to have their asset allocation plan based on one’s risk appetite and future goals in life.

Key highlights GLOBAL

Indian equities have risen, in line with global markets over the last 2 months. This period has seen heavy FII inflow into the equity markets. Global markets rally has also lifted commodities prices over this period. The US Fed has surprised with its dovish tone over the last couple of months. In its latest statement in April, it hinted at a possible next rate hike in June. At the same time, central banks in Japan and Europe have refrained from adding to their easing measures further. Dollar has lost ground against major currency partners in this period. Chinese economy has shown signs of rebound in activity after a fresh burst of lending by the banking system.

DOMESTIC

India’s relative macro outperformance continues in a difficult global environment. The recent macro and high frequency data indicate a gradual cyclical recovery is underway that should push GDP growth higher over the next year. Improvement in data was witnessed in the Industrial production and PMI (both manufacturing and services) releases. Going forward, impact of pay commission awards should help urban discretionary consumption. Likewise hopes of ‘normal’ monsoon bode well for rural demand. Inflation trajectory remains within the RBI’s comfort zone, and further cushion on inflation should come as food inflation moderates and on pass through of weak global commodity prices. While further policy rate cuts are likely limited, better transmission and changed liquidity stance, should lead to lower rates over the next 12 months.

CORPORATE

While the government has focused on reforms through executive decisions, the first half of the budget session saw some success in passing reform legislation. Going forward, bankruptcy code and GST remain key agenda items. While the latest earning season numbers are mixed, over the medium term earnings should start reflecting the improvement in the growth environment.

AXIS EQUITY FUND • • • • •

Top 10 Stocks (By Holding)

The fund focuses on delivering superior risk adjusted returns. The fund manager 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 sustainable basis from a medium term perspective while maintaining a highly liquid and risk managed portfolio. While the approach of the fund manager is towards having a stable portfolio over the medium term, the fund manager makes adjustments as needed as it looks at the evolving cycle and prospects for corporate earnings. As the economy shows steady improvement, the fund manager has constructed the portfolio with companies that should be able to take advantage of this cyclical improvement to grow topline and earnings. Within the overall sector and market cap limits, the fund remains balanced in its allocation between mid-cap and large-cap stocks and should benefit from the expected improvement in the economy over the next 2-3 years.

Top 5 Sectors 32.0% 14.4%

Information Technology

HDFC Bank Limited

8.3

Infosys Limited

7.4

HDFC Limited

5.6

Larsen & Toubro Limited

4.9

Zee Entertainment Enterprises Limited 4.9 Tata Motors Limited

4.7

Kotak Mahindra Bank Limited

4.5

Sun Pharmaceuticals Industries Ltd.

3.8

ICICI Bank Limited

3.2

Bharti Airtel Limited

3.2

12.2% 9.6%

Finance

%

Autos & Logistics

Capital Goods, Eng.

7.0%

Healthcare

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 (An open-ended Equity Linked Savings Scheme with a 3-year lock-in)



The fund is focused on quality companies having strong long term earnings growth prospects. Within that objective, the fund is comfortable looking past shorter term volatility in performance.



With a medium to long term view towards capturing growth, the fund is biased towards the stocks which can deliver superior returns. This includes private sector banks, autos, auto ancillary, housing & consumption sector etc.





The fund also includes bottom-up stock selection ideas in Pharma, IT and defence 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 balanced between its large and mid-cap allocations.

Top 5 Sectors 31.0% 16.9%

Consumer

%

HDFC Bank Limited

8.4

Kotak Mahindra Bank Limited

7.6

Tata Consultancy Services Limited

6.5

HDFC Limited

6.0

Sun Pharmaceuticals Industries Limited

5.4

Maruti Suzuki India Limited

5.1

Pidilite Industries Limited

4.4

Larsen & Toubro Limited

3.4

Motherson Sumi Systems Limited

3.4

TTK Prestige Limited

3.2

14.9% 10.1%

Finance

Top 10 Stocks (By Holding)

Autos & Logistics

Information Technology

9.7%

Healthcare

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 MIDCAP FUND

Top 10 Stocks (By Holding) Procter & Gamble Hygiene and Health Care Limited

5.1

Gruh Finance Limited

4.7

Sanofi India Limited

4.4

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

Page Industries Limited

4.0

This approach has helped the fund navigate the cycle by delivering consistent returns while keeping a tight control on risk.

Dish TV India Limited

3.8

PVR Limited

3.7

Torrent Power Limited

3.5

V.S.T Tillers Tractors Limited

3.5

Gulf Oil Lubricants India Limited

3.4

City Union Bank Limited

3.3



The fund manager has used the recent sell-off to consolidate the portfolio into higher conviction stocks while retaining the overall bias in favour of high quality bottom-up stocks that provide potential to grow cashflows over the medium term.



The portfolio seeks to add businesses with economic moats and distinct competitive advantage.

• •

%

Top 5 Sectors 25.9% 18.6%

17.4% 7.8%

Finance

Autos & Logistics

Consumer

Healthcare

7.5%

Media & Publishing

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 FOCUSED 25 FUND

Top 10 Stocks (By Holding)



The fund manager runs a high conviction portfolio, containing the fund manager’s best ideas and invests in upto 25 stocks.



Despite having a compact portfolio, diversification and focus on quality has kept the fund’s risk contained relative to the benchmark.





The stock selection approach focuses on businesses where earnings can compound at a much higher rate than peers due to the superior quality of their business model. The fund has maintained a broadly stable portfolio over the last year.

Top 5 Sectors 30.3%

15.3%

Autos & Logistics

Infosys Ltd.

8.0

HDFC Bank Ltd.

7.7

Kotak Mahindra Bank Ltd.

6.4

Sun Pharmaceuticals Industries Ltd.

6.2

Tata Motors Ltd.

5.6

Shree Cement Ltd.

5.3

Gruh Finance Ltd.

4.3

Bajaj Finance Ltd.

4.3

Indusind Bank Ltd.

4.3

Zee Entertainment Enterprises Ltd.

4.0

12.0% 10.8%

Finance

%

Information Technology

Capital Goods, Eng.

9.0%

Consumer

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.

Riskometer

Axis Equity Fund

M ely Moderate ode rat Hig rate de ow o h ly M L

(an open-ended growth scheme) This product is suitable for investors who are seeking*:

Riskometer

Axis Midcap Fund

Low

Riskometer

y Moderate Mod tel e era w Hig rate d h ly Mo Lo

This product is suitable for investors who are seeking*:

• Capital appreciation over long term

HIGH

Investors understand that their principal will be at moderately high risk

• Investment in in a concentrated portfolio of equity & equity related instruments of up to 25 companies *Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

HIGH

Investors understand that their principal will be at moderately high risk

LOW

High

LOW

LOW

(an open-ended equity scheme)

High

*Investors should consult their financial advisers if in 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 Focused 25 Fund

y Moderate Mod tel e era w Hig rate d h ly Mo Lo

(an open-ended equity scheme) This product is suitable for investors who are seeking*:

• Capital appreciation over long term • Investing predominantly in equity & equity related instruments of mid size companies with focus on relatively larger companies within this category

HIGH

Investors understand that their principal will be at moderately high risk

Low

Low

LOW

Low

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

• Capital appreciation & generating income over long term • Investment in a diversified portfolio predominantly consisting of equity and equity related instruments

High

• Investment in a diversified portfolio predominantly consisting of equity and equity related instruments

M ely Moderate ode rat Hig rate de ow o h ly M L

(an open-ended equity linked savings scheme with a 3 year lock-in) This product is suitable for investors who are seeking*:

High

• Capital appreciation over long term

Riskometer

Axis Long Term Equity Fund

HIGH

Investors understand that their principal will be at moderately high risk

Data as on 29th April 2016. 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 Axis Bank 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.