Analyst View:
This is the first midcap offering from Axis Mutual Fund which is the asset managing arm of the banking major - Axis Bank. The fund’s mandate states that it intends to invest into the upper band of the league of midcap scripts that are listed in India. The fund’s benchmark BSE Midcap, itself is comprised of close to 300 stocks currently. The fund’s universe, however would run into thousands when considering even those stocks which aren’t currently included into the index. The universe would also depend on how the fund manager categorizes scripts as midcaps and its corresponding marketcap range. However it would be safe to assume that the fund manager would be concentrating only on the stocks of BSE Midcap index as the index strives to pick the top notch few stocks matching its marketcap criteria and that’s exactly what the fund’s mandate is looking at.
In nature, midcap funds rank higher in terms of risk-reward category than largecap funds and hence would demand bit more time from an investor to outperform broader indices. Historically, these funds have outperformed over a period of more than 5 years. The fund would be an ideal hold for investors which are looking at 5+ years of time horizon and have room for equity exposure to their basic asset allocation. Looking at inherent volatility in midcap space would like to recommend our clients to invest in the fund through the SIP mode.
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