Update on Axis Fund House after Jinesh Gopani’s exit
Background
For those who are not aware, Jinesh Gopani – Head of Equity for the Axis mutual fund left the fund house couple of months back. Gopani was instrumental in defining and executing ‘Growth + Quality’ investment philosophy at Axis. This departure comes after underperformance which started in late 2021 and got exacerbated in 2022. Shreyas Devalkar who joined Axis in 2016 is in charge of managing the fund and also promoted to Head of equity now
With these events, I think its a good time to revisit the thesis
I would like to divide this post in 5 parts
Part 1 – My thoughts on strategy canvas
Part 2 – whats the best combination for portfolio. My thoughts
Part 3 – why Axis over other options within same strategy
Part 4 – changes in portfolio strategy at Axis in last 6 months and its implications
Part 1 – My thoughts on MF investment strategy canvas.
Please note – i like to invest in categories where fund manager has complete freedom to implement strategy across market segments. Therefore small and mid cap funds are not part of this discussion
Axis, MOSL, UTI FLEXI CAP, DSP FLEXI CAP
buy high roe and high growth companies (compared to benchmark) even at higher price. Very high focus on Management capabilities and integrity. Usually fund comprises large and larger mid cap companies with above average concentration in allocations. Stock selection is bottom up with very less overlap with benchmark
PPFAS, Mirae
Buying high ROE companies at reasonable price usually when there are some issues around company or sector. PPFAS prefers compact portfolio while Mirae prefers large diversified portfolios. Inclination is towards large cap companies.
HDFC and ICICI
Taking top down sectoral bets based on macro/ cycle/ valuations. Focus on relative position across ongoing cycles and subsequent mean reversion.
BANDHAN
Stick to benchmark for sector allocation. Bottom up selection of stocks within each sector. Usually individual allocations are capped. Large sector diversification and smaller allocations makes natural inclination towards small mid cap
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