Axis MF’s new Services Opportunities Fund completes an important trilogy of funds for the fund house – the earlier two being Manufacturing and Consumption.
Between these three broad themes, investors can cover the entire market – much like you cover it with 3 cap based funds – large, mid and small cap.
Shreyash says investing in these 3 broad themes is an alternative way to create equity portfolios which currently get overwhelming created with cap based funds.
The market today has two segments – healthy growth companies that are trading at high valuations and lower growth companies that are trading at reasonable valuations.
The key is to decide which lower growth companies are worth betting on for potential growth ramp up and which higher growth companies to bet on for continued execution excellence that can sustain high valuations.
The services theme – which comprises around 50% of the broad market – also has these 2 segments from which to pick and choose while casting a portfolio.
Among financials, banks currently have relatively low growth but some may be able to accelerate, while capital market companies and NBFCs have been growing faster but have lower valuation comfort.
Shreyash is bullish on a large variety of services sectors including financials, hotels, airlines, hospitals, platform companies etc.
The theme is broad enough to create a well diversified portfolio despite financials being a dominant 60% of the benchmark NSE Service Sector Index.
Just as the fund house has done with its Manufacturing and Consumption funds, expect this fund too to be relatively free of benchmark constraints in assembling its portfolio.