Fund of Fortnight

The equity market in India has become quite volatile now. Investing in multi-cap funds during a volatile equity market is a smart move due to their diversification across Large-Cap, Mid-Cap and Small-Cap stocks, which helps reduce risk while offering growth potential. [EasyDNNnews:PaidContentStart]


 

Reason for recommendation
The equity market in India has become quite volatile now. Investing in multi-cap funds during a volatile equity market is a smart move due to their diversification across large-cap, mid-cap and small-cap stocks, which helps reduce risk while offering growth potential. Fund managers have the flexibility to adjust allocations based on market conditions, shifting to stable large-caps during downturns and taking advantage of undervalued mid-caps and small-caps when opportunities arise. 

Hence, our choice for this issue is Axis Multi-Cap Fund Direct. The fund has rolling returns of one year duration median return of 28 per cent compared to 13 per cent of the category average. In the last one year, the fund has generated return of 52.55 per cent – the highest in its category as compared with 42.5 per cent generated by the category in the same period. It ranks in the second-cheapest quintile of the respective category. The fund boasted one of the lowest expense ratios of 0.64 per cent at the end of August 31, 2024. 

The pattern of low fees at the firm indicates that it is focused on delivering strong results for investors. This funds strategy leans toward smaller, more growth-oriented companies than its average peer in the multi-cap fund. Analysing additional factors, the managers have continually exhibited a willingness to take risks over the last few years, demonstrated by the portfolio’s high volatility exposure. In addition, the fund’s strategy has taken on exposure to high-momentum stocks in these years. The momentum is based on the premise that the stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. In this month, the strategy also had more exposure to the momentum factor over its peers. The portfolio is overweight in real estate and healthcare relative to the category average. Looking at the fund’s exposure to stocks and historical return, it is well-suited for high-risk investors with a long-term investment horizon. 

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