New Delhi Axis Mutual Fund, which has long been regarded as the poster child for growth investing, is launching a value fund that will be managed by none other than its equity head- Jinesh Gopani. Axis Mutual Fund and Gopani have long been considered as growth investors. There may be a change in recognition of the surge by value stocks since the pandemic. Axis Value Fund’s new fund offer (NFO) opened on September 2 and will run till September 16. Being open ended, you can invest and redeem it even after that.
Growth investing invests in fast-growing companies that trade at high valuations. Value investing seeks out companies that are relatively inexpensive, although they are generating low cash flow or may have other business issues. The sharp growth followed by Axis hit the company when the one-year performance of its key funds fell behind its peers in April 2021, as Mint wrote Here. Since then, the fund has regained lost ground on its flagship schemes such as Axis Bluechip and Axis Long Term Equity. However, the risk of relying too heavily on one style would have left a mark on the Axis management team. “For our core set of funds, our current approach remains intact. We buy good quality companies that can deliver sustainable growth. However, we believe there are other areas that offer investors a good long-term proposition. Can complement our core strategy. “Take our recent launch of passive funds as an example,” said Ashwin Patni, Head of Products and Options, Axis Mutual Fund. The traditional approach is to buy cheaper companies, wait for the market to recognize the value, and then re-rate those companies. We don’t believe in that. Over the past 10 years, price has been a high-risk, low-return proposition – more volatile than growth and yet yielding lower returns. Instead, our approach will take the health of the business account as well as its valuation. Jinesh Gopani will be managing the fund for now and we have internal filters in place to create a universe of companies suitable for this fund. But if in future we feel he needs a dedicated manager, we will appoint him.”
“As long as the value strategy is clearly defined and managed consistently, an asset management company can run multiple styles in its bouquet of offerings. I find it difficult to start a value fund with a growth-focused manager. This doesn’t appear to be a problem. To some extent, this is because of the acceptance of price recovery and the need for this type of fund in the list of AMC’s plans to offer investors style diversification,” said Kaustubh Belapurkar, director-manager research, Morningstar Advisor India. Amol Joshi, Founder, Plan Rupee Investment Services said, “The pandemic is making a comeback with a broad-based rally in value stocks and this has prompted Axis Mutual Fund to launch the scheme. “
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