AssetPlus NFO Review: Axis Multicap Fund

by Sai Sahana N R

Axis Mutual Fund has launched an NFO, which is open for subscription from November 26th, 2021 to December 10th, 2021.

Investment Objective: The investment objective of the scheme is to provide capital appreciation in the long run by investing in a diversified portfolio of equity and equity related instruments across market capitalizations.

Benchmark: Nifty 500 Multicap 50:25:25 TRI

Fund Philosophy

The fund will select stocks keeping in mind the below criteria

Quantitative factors

  • Strong return metrics
  • Stable cash flow
  • High profitability, low debt-to-equity and earnings consistency

Qualitative factors

  • Strong management pedigree
  • Transparency of operations for investors and key stakeholders
  • Credible oversight committees and strong internal controls
  • Sustainable long term business model

Portfolio Allocation

The fund will invest minimum 25% each in small, mid and large-caps at all times.
The remaining 25% will be dynamically allocated across market caps on the basis of momentum and valuation metrics.

Pros :

  1. In the long-run, multi-cap funds can be better wealth generators compared to individual large, mid or small-cap funds.
  2. Diversification across market caps and flexibility to allocate 25% to any segment based on market situations
  3. Large cap exposure provides stability in the portfolio whereas mid and small cap offers potential for growth.

Cons :

  1. Riskier compared to flexi-cap funds due to the minimum investment restriction across market capitalizations.

Suitability :

  1. Apt for equity investors with a moderate to high risk appetite with an investment horizon of 5+ years.
  2. Investors looking to have exposure to companies of different sizes and expecting a reasonably diversified portfolio.
  3. A good option for investors inclined to participate in full market cycles over medium to long terms.

It is of utmost importance that the fund should be discussed with your financial advisor and then ascertain whether it is suitable to invest. Always read the scheme documents fully before investing.