Axis Capital Builder Fund is a closed-ended equity fund with a term of 1540 days (a bit more than four years) which will invest in stocks across market capitalization (large-cap, mid-cap and small-cap). The fund will hold a concentrated portfolio of 30-40 stocks selected from the ‘Axis Universe,’ a larger set of 350 stocks.
The fund will follow a bottom-up approach and focus on the key elements of the ‘Axis strategy’, centred on:
Growth Bias – looking for sustainable growth
Superior risk-adjusted returns
High conviction investing
Following the rural push in Budget 2018, the fund will embrace rural India as one of its key themes. It will focus on rural consumption and infrastructure as key sectors for its portfolio. It will also try to maintain a large-cap allocation of at least 50% of the portfolio. The fund may also hedge (convert to debt-like returns) up to 15% of its portfolio.
Closed-ended funds have no established track record to evaluate them against. This particular one has no distinctive theme either other than a generic focus on good investment practices and promising sectors. One has to rely on the overall record of the fund managers and the fund house. Both fund managers, in this case, are highly experienced.
Anish Naik and Anupam Tiwari will manage the fund. Naik has been an Assistant Fund Manager with Axis Mutual Fund for about two years following about seven years as a Research Analyst with the same fund house. He previously worked with Goldman Sachs. Anupam Tiwari was a Research Analyst at Reliance AMC for about 6 years and then a fund manager at Principal PNB for about 5 years. He has worked with Axis Mutual Fund as a fund manager for about 1.5 years.
Two general advantages of closed-ended funds are:
The fund managers’ performance can be better when they do not have to worry about sudden inflows and outflows
The lock-in stops you from panic selling the fund or buying in a rush at the wrong time.