Is the Axis Bluechip Fund a Good Option for an SIP Mutual Fund?
Recently, 92% of large-cap mutual funds have underperformed their benchmark indices. However, the Axis Bluechip Fund has stood out in this performance. For any 5-year period since its launch, this fund from Axis Mutual Fund has beaten its benchmark 99% of the time. This article delves into the unique strategies and performance of the Axis Bluechip Fund and examines if it is a good option for a Systematic Investment Plan (SIP) mutual fund.
The Secret Behind Its Success: Unique Bets and Bottom-Up Stock Picking
The management team at Axis Bluechip, particularly led by Shreyas Devalkar, has deployed some unique investment strategies, which have contributed to the fund's outstanding performance. One of the key aspects of this fund is its focus on stocks where other large-cap funds have either not yet invested or have invested in smaller amounts. Here are two prime examples:
Bajaj Finance and Avenue Supermarts: High Conviction Investments
Bajaj Finance and Avenue Supermarts are two notable stocks in the Axis Bluechip Fund's portfolio, with significant higher allocations compared to the average of large-cap funds. Since 2017, Bajaj Finance and Avenue Supermarts have consistently been in the top holdings of the fund. Between July 2017 and March 2017, the prices of these stocks have surged approximately fourfold since 2018. The fund's strong performance in these stocks is a testament to the fund manager's top-down approach and conviction in their bets.
Long-Term Success in Varieties of Years
Axis Bluechip has outperformed the NIFTY 50 TRI and its peers in multiple years, including 2013, 2017, 2018, 2019, and 2020. Its bottom-up approach allows it to make smarter, more personalized investment decisions, resulting in superior performance.
Performance and Investment Strategy
The fund's impressive performance can also be attributed to its sector allocation. Unlike its peers, Axis Bluechip has adopted different strategies, as demonstrated in the table below:
Top Sectors of the Axis Bluechip Fund
The fund's deep sector allocations and concentrated focus on top stocks have not only generated high returns but have also resulted in a significant #AUM of Rs 36000 crore, making it the largest actively managed large-cap fund. Additionally, due to these large inflows and the limitation on investment opportunities, the fund currently maintains a relatively high cash level.
However, as of late, the fund has experienced some underperformance, being among the 5 worst-performing large-cap funds in 2022. This can be attributed to the underperformance of growth stocks, which the fund heavily invests in.
Conclusion and Advice
Despite the recent underperformance, the Axis Bluechip Fund has historically offered attractive risk-adjusted returns over the long term. This makes it a good option for SIP mutual funds, provided investors are willing to endure short-term volatility for potentially higher returns in the long run.
If you found this information valuable, please UPVOTE and SHARE to help us reach more readers. To learn more about personal finance, consider following us on ET Money.