Registering a sharp fall in February and March due to Covid-19 outbreak and the resultant global economic slowdown, the domestic equity market recorded a multi-year low in late March. But since then it has been in a recovery mode.

There are signs of optimism in the global as well as thelocal market now.

Interestingly, all market-cap stocks appear to be participating in the current rally, unlike the late 2019 rally which was marked by divergence and mainly driven by large-cap stocks.

Investors looking to participate and diversify the portfolios can consider buying a quality multi-cap fund that has the flexibility to invest across the entire market capitalisation.

Axis Focused 25 is among the top performers in the multi-cap category. The fund has a good track-record. Since its launch in 2012, it has delivered annualised returns of 12.7 per cent.

Moreover, it has consistently outpaced the benchmark, Nifty 50 TRI, across all-time periods.

Over one-, three- and five-year periods, it has delivered a negative return of 8.83 per cent and positive annualised returns of 4.16 per cent and 8.23 per cent, respectively, while the benchmark returns for these time-frames are negative 19 per cent and positive returns of 1.63 per cent and 3.8 per cent.

Also, Axis Focused 25 has beaten some of its peer funds in the focussed category, such as L&T Focused Equity, DSP Focus and HDFC Focused 30, in their available track records. To mitigate market volatility, investors can take the SIP route, and those with a high risk appetite can invest lump sums as the market corrects.

 

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Strategy and Portfolio

As the name suggests, Axis Focused 25 invests in a concentrated portfolio of equity, to a maximum of 25 stocks across large-, mid- and small-cap spaces.

With a bottom-up investing strategy, the fund follows a high conviction investment approach in stock selection. It invests predominantly in the top 200 stocks by market capitalisation.

The fund has predominat exposure to large-cap stocks and moderately holds mid-cap stocks.

Notably, it had contained the downside well in the 2018 market correction by increasing debt allocation; similarly, the downside is limited in the current correction. It is also active in the debt segment and drastically increased its allocation recently.

Finance and banks are the top preferred sector choices — while the former witnessed a reduction in allocation over the past six months, the allocation to the latter is almost stable. There has been an increase in allocations to the software and retailing sectors. The fund recently added Infosys stock to the portfolio and upped its allocation to Avenue Supermarts that has delivered good returns over the past year.

Other recent additions are HDFC Life Insurance Company, Hindustan Unilever and SBI Cards.

On the other hand, it has slightly trimmed its exposure to Bajaj Finance and Bajaj Finserv.

The fund had timely trimmed its exposure to automobiles and auto ancillary sectors in early 2019 as they faced challenges.

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