Axis Bluechip Fund has had an impressive track record. Can this be used as an active large cap fund to beat Nifty at lower risk? Let us find out. This question assumes importance because active large cap funds had struggled to beat large cap benchmarks well before SEBI mandated that 80% of their portfolio consist of large cap stocks.
See this study, for example, Only Five Large Cap funds have comfortably beat Nifty 100! Even among these five, it is debatable how many were pure large cap funds since inception. The definition of what a large cap stock is has always been the same: it’s market capitalization should be within the top 100 of all stocks listed at the NSE (or BSE). However, mutual funds had considerable freedom in picking stocks outside of the top 100, and that is (was?) a key reason for outperformance against the Nifty or the Sensex.
Going forward, assuming fund houses respect SEBI rules, beating Nifty will be tough for large cap funds and hence the question about Axis Bluechip fund assumes importance. This is a case where the historical nature of the fund is more important than its risk or reward profile. So the only reliable way to find out is to dig through Axis fund factsheets
Axis Bluechip Fund: Interesting facts
- Launched in Jan 2010 as “Axis Equity Fund” merely as an open-ended growth scheme. From June 2017 it was labelled as a large cap scheme.
- It operated as a large and midcap fund from inception to October 2017.
- It became Axis Bluechip Fund from May 2018
- The fund appears to have held ICIC, HDFC bank from inception (I did not check every factsheet)
Axis Bluechip Fund vs Nifty 50 TRI
The key finding here is that Axis Bluechip is effectively from Nov 2017 only. This is the performance against Nifty in that period.
Not exactly spectacular and not terrible either. The performance in the last year is not a great sight, but it has managed a recovery in the previous three months.
The drop in the outperformance of the fund over 1615 3-year data points can be seen below.
Therefore going forward, it would only be impossible to assume Axis Bluechip Fund will be able to beat Nifty 50 TRI over any given period. There is not enough evidence. New investors wanting a solid large cap based equity portfolio should consider either hybrid funds. Please consult these articles to understand why:
- Why Aggressive Hybrid (balanced) Mutual Funds score over diversified funds
- Balanced Advantage vs Aggressive Hybrid Funds: When to use what
- 11 aggressive hybrid (balanced) mutual funds that have beat Nifty 100!!
- Using Balanced Mutual Funds As The Core Equity Portfolio Holding
You can consider building your portfolio with My Handpicked Mutual Funds July 2019 (PlumbLine) or shortlist your own funds with the Equity Mutual Fund Performance Screener July 2019
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M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] comAbout freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
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