It's not the best time for mutual fund managers. In fact, the last couple of months may have been sleepless and a nightmare for most. There is one largecap equity mutual fund scheme that has performed much better than almost all of the other large cap equity schemes and is relatively better-off in its category than most. Axis Bluechip Fund - Growth really stands out, when compared to most others.
Axis BlueChip Fund Performance Vs Peers
|2-year returns||3-year returns||5-year returns|
|Axis Blue Chip Fund, Growth||1.13%||7.17%||7.74%|
|ICICI Prudential Bluechip Fund, Growth||-7.05%||-0.29%||4.07|
|SBI Bluechip Fund, Growth||-8.64%||-2.11%||3.41%|
|HDFC Top 100 Fund, Growth||-9.04%||-3.79%||2.2%|
|Adita Birla Sunlife Equity Fund, Regular Plan Growth||-9.25%||-3.16%||2.49%|
|Mirae Asset Large Cap Fund||-5.86%||0.47%||6.05%|
Reasons for a better performance
In the last couple of years, Axis Bluechip Fund has done better, largely because of its portfolio. While most other largecap funds have stocks like HDFC Bank and ICICI Bank, making it as their top investments, Axis BlueChip Fund portfolio is slightly different.
It has almost a 7 per cent holding in Avenue Supermarkets and another 7 per cent in Kotak Mahindra Bank. While most other stocks have taken a battering, Avenue Supermarkets has managed to fall less, which is one of the reasons why Axis Bluechip Fund may have performed even better than peers.
It also has a significant amount in debt, which prevents an even greater erosion of the portfolio.
Does it make sense to buy Axis Bluechip Fund?
It's difficult to recommend any mutual fund scheme, as things and investment strategies work differently in different situations. As an example, should the economy recover swiftly, equity schemes that have a heavy bank portfolio will gain sharply. On the other hand, if the economy takes a turn for the worse, portfolios that have a fair amount of defensive stocks, would do well.
Stock leadership can change and so can mutual fund scheme leadership. Until a year back, pharma stocks were badly dumped in favour of banks. Today bank stocks are being sold into and pharma stocks are being bought into. The simple logic is that Covid 19 situation means better export potential for pharma, better pricing and swifter US FDA approvals.
On the other hand, as the economy stumbles, banking stocks are the first to tumble. Leadership in stocks can change and so can leadership among equity schemes.
it's foolhardy to predict any thing at the moment.