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Axis Mutual Fund launches value fund. Should you invest?

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Axis Mutual Fund launches value fund. Should you invest?

Axis Mutual Fund has launched a value fund. The new fund offer (NFO) of Axis Value Fund opened on September 2 and will close for subscription on September 16. Jinesh Gopani will manage the scheme.

Ashwin Patni, head- product and alternatives, Axis Mutual Fund, says that the offering is differentiated and is aimed at expanding the fund house’s bouquet of schemes. Patni says that this continues the fund house’s effort to make more relevant and complimentary long term products for investors. “We have put together a strategy that we believe will be efficient and suit a lot of investors and hence we launched this value fund,” says Ashwin Patni.

The scheme is a little different from the value schemes present in the market. “The approach in this value fund will be different from the traditional value investing in the market. You can say we are aiming for a hybrid (growth+value) sort of strategy in this scheme. This fund won’t just focus on cheap companies and then wait for the market to recognize value. We aim to select stocks on the basis of a lot more than just valuations. We will take into account the health of the business as well. There will be a process of selecting companies after understanding why they may be at a lower valuation in the market. There would be internal filters in place to identify stocks for the portfolio. We will look for companies that might have a growth potential in the long term because of say change in cycle, management change or strategy shift,” says Ashwin Patni.

However, mutual fund advisors believe that retail investors need to give it some time before investing in the scheme. “Over the past one year with the uptick in the broader markets, the value segment has shown a strong comeback outperforming growth stocks. In any overheated/high valuation market it makes more sense to bet on value strategy to take advantage of the upside price potential of quality undervalued stocks. This along with the future potential in the value segment may have prompted the AMC to enter this space,” says Rushabh Desai, AMFI-registered mutual fund distributor, based in Mumbai.

“Axis AMC is currently growth oriented and has been following a successful growth-oriented strategy for a long time. This fund may not follow the traditional pure value style to avoid cyclicality and under performance in the fund which can be quite beneficial at times especially in the value segment. I would like to wait and watch for a few years how the fund’s strategy and performance pans out in different market cycles before venturing in it. Currently, there are some good quality existing value oriented funds with long-term proven strategies which can be explored by investors if they wish to invest in the value space,” adds Desai.

Axis mutual fund has run a strong growth-oriented basket of funds for years. Last year, most of their growth-oriented equity schemes took a hit. Read more here:
Several equity schemes of Axis Mutual Fund are underperforming. What should you do? However, the fund house has recovered in the last couple of months.

Fund at a glance:
NFO Open: 02-Sep-2021

NFO Close: 16-Sep-2021

Minimum Investment : Rs 5,000

Plans: Growth, IDCW

Exit Load (%): For units in excess of 10% of the investment,1% will be charged for redemption within 365 days

Benchmark: S&P BSE 200 TRI

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