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Axis Small Cap Fund marked its 10th anniversary with a strong long term track record of delivering 24% CAGR with a 5% alpha over benchmark. However, the last couple of years have been a struggle, with the last 12 months in particular seeing the fund slip in rankings significantly.
Shreyas acknowledges that the fund’s low presence in investment-themed sectors like capital goods, infrastructure and power as also the PSU pack – all of which were star performers in 2023 – has hampered its performance.
While some of these are now at rich valuations, he is evaluating and selectively adding names with healthy growth prospects and reasonable valuations.
He believes money will rotate from very richly valued stocks and sectors to more reasonably valued ones. Key beneficiaries can include stocks in the consumer discretionary space – especially those on the right side of the K-shaped growth trend. Discretionary spending on travel, tourism, luxury goods, high end real estate etc are showing strong growth trends while consumption from lower income households continues to be weak.
In the Axis suite, the Axis Smallcap has truly been a performer. It was a stupendous performer at inception itself.
The performance will look weak for 2023 as Anupam Tiwari the earlier fund manager quit in 2023 and since then they r struggling as they do not have a dedicated small cap manager. Shreyas with all due respect is a flexicap manager and not small cap.
