Axis Flexi Cap Fund Regular Growth INF846K01B51

Axis Flexi Cap earns a Below Average Process Pillar rating.

The process is strengthened by its team of two portfolio managers, which is enough to execute the process. However, the rating is weakened by the parent firm's five-year retention rate of 66%, which raises concerns about long-term strategic consistency.. Subpar risk-adjusted performance also detracts from the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

This strategy has more exposure to the Growth factor than the Flexi Cap Morningstar Category average. But in terms of market capitalization, it is on par with peers. Analyzing additional factors, the managers have been consistently underweighting yield compared with the Morningstar Category peer over recent years. Its preference for stocks with lower yields may well lead to a growthier portfolio. However, growth stocks court additional risks if their forecasts do not come to fruition and are often more volatile than companies with stable dividends. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy also has tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity, during these years. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, this strategy holds highly liquid companies. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. Nevertheless, the fund's Liquidity exposure was in line with peers in the latest month. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in real estate and consumer cyclical relative to the category average by 2.7 and 2.7 percentage points, respectively. The sectors with low exposure compared with category peers are energy and basic materials, with energy underweighting the average portfolio by 3.1 percentage points of assets and basic materials similar to the average. The portfolio is composed of 57 holdings and is relatively concentrated. In particular, 45.2% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 40.4%. And finally, in terms of portfolio turnover, on a year-over-year basis, 37% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.