Axis Quant Fund

(An open ended equity scheme following

a quantitative model)

NFO opens: 11th June 2021

NFO closes: 25th June 2021

Axis Quant Fund

(An open ended equity scheme following a quantitative model)
This product is suitable for investors who are seeking*:
• Capital appreciation over long term.
• An equity scheme that invests in equity and equity related instruments selected based
on quant model.
*Investors should consult their financial advisers if in doubt about whether the product is
suitable for them.

The product labelling assigned during the New Fund Offer is based on internal assessment of the Scheme Characteristics or
model portfolio and the same may vary post NFO when actual investments are made.
Equity investors path to wealth creation

Invest for
the long term

Buy them at a
Identify quality reasonable price
companies using
Quantitative and
Qualitative parameters

2
Avoiding wealth destructors can help in
achieving long term wealth creation

(INR Lakh)
12
10.9 (26.9% CAGR)

10
Investment (Dec 10)

8 Value After 10 years (Dec 20)

4 2.3 (8.6% CAGR) 0.9 (-0.8% CAGR)

2
1 1 1

0
BSE100 Index Top Quartile Bottom Quartile

Avoiding stocks in the bottom quartile is a critical as selecting winners in the Top quartile.

Source: Bloomberg, An investment of INR 1 lakh considered in BSE 100 for the 10 year period from 31st Dec 2010 to 31st Dec 2020.
Past performance may or may not be sustained in future. 3
Data increasingly driving Fund Management
decisions

Structural recording of data Data explosion: Better analysis and

A change in assimilation of information
investment
paradigm

Deeper data history

Transparency in data disclosures

Accelerated decision making Efficiency in investment process

4
Usage of Quantitative data can compliment
Traditional Fund Management Process and
can be an alternative to Alpha generation

5
A Quant approach can provide a strong framework

Performance
across market
cycles
Better risk
adjusted
Robust performance
investment process

Rules
based
approach Discipline
Systematic
decision
Data usage in a making Enhanced
structured
risk management
format
6
Presenting

Axis Quant Fund

(An open ended equity scheme following a
quantitative model)

A fundamentally driven quant based approach

7
Axis Quant Fund

Fundamental Rule based Axis

approach criteria
Quant Fund
Use of factors like Quality, Usage of risk factors like
Growth, Value sector/ stock constraints,
rebalancing frequency

The parameters given above are for explaining quantitative model proposed to be used by the Scheme. The fund manager at his discretion may modify
parameters to be used in quantitative model. Investors are requested to refer to detailed asset allocation and investment strategy given in Scheme
Information Document for complete details. 8
Investment philosophy
Using Q-GARP (1/2)
A philosophy that aims to identify Quality stocks in combination with the tenets of Growth and Value investing

The approach focuses on selecting a portfolio of Quality stocks with good Growth but At a Reasonable Price

Parameters comprising Q-GARP

Quality The tendency of lower risk and higher quality assets to generate
higher risk adjusted returns

Growth A parameter that captures the excess return on stocks due to improving
growth prospects

An important parameter that acts as a safety net by identifying the

Valuation
difference between market price and the fair value

The parameters given above are for explaining quantitative model proposed to be used by the Scheme. The fund manager at his discretion may modify
parameters to be used in quantitative model. Investors are requested to refer to detailed asset allocation and investment strategy given in Scheme
Information Document for complete details. 9
Investment philosophy
Using Q-GARP (2/2)
Parameters
• ROE / RoCE
• Debt / Equity (Leverage)
• Volatility
Quality

Parameters
• P/E
• P/B All
• Dividend yield Seasons
• Price to sales Portfolio
capturing the
best of the main
styles

Valuation Growth
Parameters
• Earnings improvement
• Change in profit margins
• Analyst forecasts
The parameters given above are for explaining quantitative model proposed to be used by the Scheme. The fund manager at his discretion may modify
parameters to be used in quantitative model. Investors are requested to refer to detailed asset allocation and investment strategy given in Scheme
Information Document for complete details. 10
From theory to practise: Application of Q-GARP

Name Sector Quality Growth Valuation Composite

Score*

Stock A Industrials 2.27 2.61 1.92 6.8

Stock B Financials 0.4 1.21 3.33 4.94

Stock C Financials 0.75 1.8 1.3 3.85

Stock D IT 1.58 0.74 1.21 3.53

Stock E Consumer Staples 3.31 0.16 -0.94 2.53

Stock F Utilities 1.46 -0.23 0.06 1.29

Each stock is assessed along all the dimensions of Q-GARP and a composite score is calculated based on the individual metrics

Higher the score, higher the probability of weight to a stock

The parameters given above are for explaining quantitative model proposed to be used by the Scheme. The fund manager at his discretion may modify
parameters to be used in quantitative model. Investors are requested to refer to detailed asset allocation and investment strategy given in Scheme
Information Document for complete details. 11
Portfolio construction, review and monitoring

Stock
Composite level
Ranking constraint

The portfolio will be reviewed & monitored on

a pre-defined frequency

Portfolio
Stock level constraint is based on the liquidity of
the stock

Ad-hoc rebalancing only in case of exceptional

Sector situations (Adverse news, Management or Board
Stock level
Risk issues, Material litigation issues)
constraint

For detailed asset allocation and investment strategy, please refer Scheme Information Document of the Scheme 12
Case study: Efficient risk management

Weight allocation process(*) Stock B Stock C

• Risk plays an important role in

Sector Financials Financials determining the sizing of the stock
in the portfolio
Composite Score (A) 4.94 3.85

Risk of the stock (B) 11 4 • Stock C has a higher allocation

compared to Stock B as the
Composite Score to Risk ratio (A/B) 0.45 0.96 incrementally higher composite
score in Stock B doesn’t
compensate for higher risk
Other risk aspects Low liquidity stock Highly liquid large
in the mid cap space cap stock • Expected return is one of the
inputs in the process, risk is
Weight in the portfolio Lower Higher also an equally important
consideration

The risk of the stock is a function of its volatility

The parameters given above are for explaining quantitative model proposed to be used by the Scheme. The fund manager at his discretion may modify
parameters to be used in quantitative model. Investors are requested to refer to detailed asset allocation and investment strategy given in Scheme
Information Document for complete details. 13
In Summary

Universe of Listed Stocks

Stocks are eliminated from the universe based on

• Minimum criteria for
• Data
Elimination Criteria • Market Cap
• Liquidity
• Companies with Red Flags also eliminated based on input from sector experts
monitoring
review and
Portfolio

• Stocks are evaluated along multiple parameters and across different styles
Scoring &
Ranking • Each stock gets a ranking along each of the parameters
• Composite final rank/score is calculated from individual ranks

Portfolio Portfolio of 50-60 stocks constructed using an optimization process that utilizes
• Composite Rank
• Risk of the stock
• Stock sizing constraints
• Sector Constraints
For detailed asset allocation and investment strategy, please refer Scheme Information Document of the Scheme. 14
Model Performance
and Attributes

15
Model performance: Historic record
Period Quant Model BSE 200TRI (B) Outperformance
(A) C = A-B

CY 2020 25.7% 17.9% 7.80%

CY 2019 9.6% 10.4% -0.80%
CY 2018 -0.4% 0.8% -1.20%
CY 2017 41.2% 35.0% 6.20%
CY 2016 6.7% 5.2% 1.50%
CY 2015 9.6% -0.2% 9.80%
CY 2014 49.3% 37.4% 11.90%
CY 2013 10.5% 6.1% 4.40%
CY 2012 30.1% 33.2% -3.10%
CY 2011 -16.3% -26.0% 9.70%
CY 2010 29.3% 17.8% 11.50%
CY 2009 85.5% 90.9% -5.40%
CY 2008 -52.4% -55.9% 3.50%
CY 2007 72.4% 62.3% 10.10%

The model has managed to beat the benchmark 10 times in the last 14 years with
an average outperformance of 7.6%
Source: AceMF, Axis AMC Research. Quant model performance is post fees and expenses of 2.5% p.a. Past performance may or may not sustain in future. All
information contained in this slide is for illustration purpose only to show how quant models function. The model performance is derived based on back tested result
considering Quality, Growth and Value as parameters. The back tested result does not in any way indicate the performance of the Scheme. The actual model and the
Scheme portfolio shall be constructed based on the provisions in the Scheme Information Document. Data is from 31st Dec 2006 to 31st Dec 2020. 16
Model performance: Rolling return

3 Year rolling return 3

40.0%
years

35.0%

30.0% On a 3 year rolling return,

25.0% the model has never
delivered negative
20.0% returns
15.0%

10.0% 17
years
5.0%

0.0%

-5.0%
In the past 17 years,
the model has
outperformed the
Model S&P BSE 200 TRI benchmark on 99.2%
instances

Source: AceMF, Axis AMC Research. Quant model performance is post fees and expenses of 2.5% p.a. Past performance may or may not sustain in future. All
information contained in this slide is for illustration purpose only to show how quant models function. The model performance is derived based on back tested result
considering Quality, Growth and Value as parameters. The back tested result does not in any way indicate the performance of the Scheme. The actual model and the
Scheme portfolio shall be constructed based on the provisions in the Scheme Information Document. Data is from 31 st Dec 2006 to 31st Dec 2020. 17
Model performance: Recent experience

Drawdown Experience in 2020

0.00%

-5.00%

-10.00% During the market

correction in Mar-20,
-15.00%
the portfolio fell lesser
compared to the
-20.00%
benchmark

-25.00%

-30.00%

-35.00%
During the pullback, the
-40.00% portfolio recovered the
Jan-20 Jan-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20
initial capital 3 months
Portfolio BSE 200 earlier (Aug-20) than
benchmark (Nov -20)

Source: AceMF, Axis AMC Research. Quant model performance is post fees and expenses of 2.5% p.a. Past performance may or may not sustain in future. All
information contained in this slide is for illustration purpose only to show how quant models function. The model performance is derived based on back tested result
considering Quality, Growth and Value as parameters. The back tested result does not in any way indicate the performance of the Scheme. The actual model and the
Scheme portfolio shall be constructed based on the provisions in the Scheme Information Document. Data is from 31 st Dec 2006 to 31st Dec 2020. 18
Portfolio Characteristics
Dividend Yield Weight average RoE
2.5 25.0

2.0 20.0

1.5 15.0

1.0 10.0

0.5 5.0

0.0 0.0

Quant model S&P BSE 200 Quant model S&P BSE 200

Model allocation to Large caps

90.0

80.0

70.0

60.0

50.0

40.0

Model allocation to Large caps

Source: Axis MF Research, Bloomberg. All information contained in this slide is for illustration purpose only. The actual model and the Scheme
portfolio shall be constructed based on the provisions in the Scheme Information Document 19
Why invest in Axis Quant Fund?
• The strategy will appeal to investors looking to diversify their existing portfolio of funds through a novel approach to investing

• The key reasons to invest in the fund include

A unique proposition of a fundamentally driven

quantitative approach

Unbiased approach to portfolio management

Diversified portfolio across sectors and

market capitalization

Aims to outperform across cycles

Target Audience/
Client Base
20
Product details
Scheme
Axis Quant Fund
Name

Scheme
Benchmark S&P BSE 200 TRI

To generate long-term capital appreciation by investing primarily in equity and equity related instruments selected
Investment
based on a quantitative model. However, there can be no assurance that the investment objective of the Scheme will
Objective be achieved.

Fund
Deepak Agrawal and Hitesh Das (Foreign securities)
Manager

Asset Equity & Equity related instruments of selected companies based on a quantitative model: 80% to 100%; Other Equity
Allocation and Equity related instruments: 0% to 20%; Debt & Money Market Instruments: 0% to 20%; Units issued by REITs &
InvITs: 0% to 10%

If redeemed/ switched-out within 12 months - For 10% of investment: Nil, For remaining investment: 1%
Exit Load
If redeemed/switched out after 12 months from the date of allotment: Nil

Minimum
Application Rs 5,000 and in multiples of Rs 1/- thereafter
Amount

21
Disclaimer

Past performance may or may not be sustained in the future.

The data/statistics / information given are to explain various concepts and general market trends in the securities market.
The information on sector(s)/stock(s)/issuer(s) mentioned in this presentation is provided on the basis of publicly available information
illustration purpose only and should not be construed as any investment advice / research report / recommendation to buy / sell / hold
securities by Axis AMC / Axis Mutual Fund. The Fund manager may or may not choose to have any present / future position in these
sector(s)/stock(s)/issuer(s).
Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability
restricted to ` 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk
Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.
This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision.
Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall
be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No
representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC
reserves the right to make modifications and alterations to this statement as may be required from time to time.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully

22
Thank You

23