Axis AMC

AXIS Brand Equity PMS


Key Portfolio Attributes

Mr. Jinesh Gopani

Inception Date: 27 January 2017

Number of Stocks: 20-22

Portfolio Manager’s Name: Mr. Jinesh Gopani

Portfolio Manager’s Experience: 16 years of experience in the capital markets of which 8 years are in equity fund management. Previous experience includes Birla Sun Life Mutual Fund and Voyager Capital.

Portfolio Manager’s Qualification: M.M.S. in Finance from Mumbai University

Investment Objective

The portfolio seeks to buy businesses with strong brands that provide:

• Sustainable Competitive Advantage
• Capable Management Team
• Good Corporate Governance.

Portfolio Strategy

Brands not only help to create a strong recall in the minds of consumers but also make for a worthy investment theme. This is because companies with brands create a distinct bargaining power due to economies of scale, high entry barriers, strong pricing power and/or operating in under-penetrated markets. These translate into superior margins and growth. Effectively generating higher investor returns over business cycles!

Brands may be a result of : –

• Strong connect with the customer

• Differentiated positioning

• Distinguishable product/service quality

• Consistency in delivery of good performance

• Innovation

More about Axis Brand Equity

How many of us know “Peter-England/Louis Philippe/Allen Solly”, are Indian brands owned by Aditya Birla Group?

Does “Brand” have any Monetary Value?

There are hundreds of brands that have survived and growth in decades, driving through many cycles, adding more and more value to the shareholders. And, there are few (very few) brands that failed as well. One such example is “Kodak”. When the electronic based storage started replacing the “film-technology”, the company had collapsed.

An excerpt from the Forbes on the failure of Kodak is appended: “Immensely successful companies can become myopic and product oriented instead of focusing on consumers’ needs. Kodak did not fail because it missed the digital age. It invented the first digital camera in 1975. However, instead of marketing the new technology, the company held back for fear of hurting its lucrative film business, even after digital products were reshaping the market

Another example in this regards is Microsoft, when the smart-phones gaining momentum. Apple’s i-phone and Google’s Android were way ahead when Microsoft launched its Window-phone. However, Microsoft, brand has not failed due to various other innovations and Management capabilities.

So, basically – Products may fail, Businesses may become out dated, and Brands fail (rarely !)

The investment Philosophy of Axis Brand Equity PMS is based on three strong and practical reasonings of the Portfolio Manager :-

• Companies with brands create a distinct bargaining power – due to economies -of-scale, high-entry-barrier, strong-pricing-power, operating in under-penetrated markets
• Due the reasons stated, brands create superior margins and growth.
• Brands generate higher investor returns across various business-cycles.

Investment Strategy of Axis-PMS – “Axis-Brand-equity”

• Bottom-up” stock pick up is followed, and higher allocations are given to “best-ideas after bottom up research” within the frame of “strong-brands”.
• Portfolio is constructed as a “balanced-mix” of established brands as well as emerging brands.

• Portfolio follows multi cap investment strategy with exposures across various sectors and market-capitalization.
• Portfolio strives for enhanced risk adjusted returns and follows screening mechanism to select quality businesses.
• Portfolio follows low churn and companies are selected with over 3 years perspective.




Performance Table #


Trailing Returns (%) 1m return 3m return 6m return 1y return 2y return 3y return 5y return 10y return Since inception return
Portfolio-3.8%-4.1%-8.1%0.6%27.9%11.3%10.0%-9.3%
S&P BSE 200-4.1%-1.0%-2.8%6.7%33.3%12.9%11.5%-13.0%



QRC Report Card *




VIEW DETAILED QUALITY, RISK, CONSISTENCY ANALYSIS

Portfolio Holdings


Holding %
ICICI Bank Ltd 9.11
Infosys Ltd 7.58
HDFC Bank Ltd 6.89
Bajaj Finance Limited 6.69
Asian Paints Ltd 5.47
Top 5 Equity Holdings 35.74

Sector Allocation


Holding %
Healthcare 8.01
Information Technology 11.41
Capital Goods, E&C 15.17
Consumer 17.30
Finance 34.40

Market Cap Allocation


Allocations %
Large Cap 61.0
Mid Cap 27.1
Small Cap 2.3
Cash 9.6


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Disclaimer

#Returns as of 31 May 2022. Returns up to 1 Year are absolute, above 1 Year are CAGR.

*QRC Report Card data is updated quarterly. Current data is as of Mar 22.




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Do Not Simply Invest, Make Informed Decisions