This is a performance review of Axis Midcap Fund. We find out how consistently it has performed against its benchmark and peers to find out if one can invest based on recent good performance or give it some more time to perform. Regular readers may recall that last week we had looked at Axis Small Cap Fund
Axis Midcap was started in Feb 2011 with a mandate to invest 75% in midcap companies (later revised to 65% to comply with SEBI rules). Prior to May 2018, it had a specific mandate to focus on companies with the largest market cap within the mid cap space. Since May 2018 it has had no such restriction.
With the little information available about historical market cap allocation, I could not find anything out of place. Axis Midcap Fund has maintained at least 65% exposure to midcap stocks for the last three years. The fund has also held about 15-17% of large cap stocks. Sadly these numbers depend on which source you consult!
VR had listed this fund as a mid and small cap fund in 2015. So at the very least, it had noticeable small cap exposure in the past Its cash exposure has increased in the last few months. This year it has held about 18-19% cash. In Jan 2018 just prior to the onset of the fall in midcap stocks, the fund was fully invested with 94% equity.
So with the available data, I would like to assume that the recent performance – last 1Y trailing return of the fund is 3.7% while BSE Midcap fell by 10% – is due to a mix of cash, large caps and no small caps (the has held a small exposure in the last few months).
Let us now find out how the fund has performed against benchmarks and a couple of peers.
Table of Contents
Axis Mutual Fund Performance Analysis
Let us first compare the fund with Nifty Midcap 150 TRI and BSE Midcap TRI over every possible 3,4, and five year period in its history.
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Three years
Four Years
Five years
Now, that is not what you would refer to as consistent performance!
Both the HDFC and Franklin Midcap funds have had a much better track record than Axis Midcap. Only after the fall in midcaps has the Axis fund picked up.
Summary: Invest or give it some time to perform?
Although Axis Midcap has managed to do better than other funds and indices since Jan 2018, it does not have a good long term track record. While existing investors can continue, new investors need to wait and watch and see how it fares in future. There are other funds in the midcap category with an impressive long term category. Use the Sep 2019 Equity Mutual Fund Performance Screener to find consistent performers.
Although Shreyash Devalkar who has steered Axis Midcap and Axis Bluechip (reviewed here) since Nov 2016 has done a good job, I think this fund needs more time under its belt.
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About the AuthorM. Pattabiraman(PhD) is the author and owner of freefincal.com. He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Follow @freefincal “Pattu” as he is popularly known, 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 topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis.
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2 Comments
Please tell me something about the future of sbi small cap fund.
M. Pattabiraman(PhD) is the author and owner of freefincal.com. He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Follow @freefincal “Pattu” as he is popularly known, 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 topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis.
He conducts free money management sessions for corporates and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner
This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Please tell me something about the future of sbi small cap fund.
Please review SBI small cap fund.