Axis Nifty 100 Index Fund Review

Axis Nifty 100 Index fund was launched by Axis Asset Management Company on the 8th of October, 2019. The fund has completed a 1-year journey and competed with Nifty 100 TRI as its benchmark.

The fund is a pure Index fund (Passive fund) concentrating on Nifty 100 components. In the year, the fund has grown 2.41%. For every investor, 2.41% is like a hell return which is much lesser than the bank interest rate. The fate lying here is, we can’t time the market.

Unfortunately, the benchmark Nifty 100 has performed higher than the bank return and shown a 4.3% return in the last year.

Let us try to understand the fund in detail.

Axis NIFTY 100 Index Fund Overview:

    • Our readers could recollect, the article on Index Fund, where the fund manager has a small role in managing the allocation of stocks.
    • But the stock should be the same as the Nifty 100 index. This is a small reason for the fund to downperform compared to the Index.
    • The fund size (Asset Under Management) is currently at Rs. 372 Cr. It was at Rs. 445 Cr before the COVID-19 market crash.
    • The expense ratio is just 0.15% for a direct plan and 1% for a Regular plan. This is almost the least in any Equity mutual fund.
    • The total holdings of the fund are 100% Equity with 100 stocks. The proportion is,
        • LargeCap Stocks – 87.77%
        • Midcap Stocks – 3.04%
        • Others – 9.46%
    • You can start investing with a minimum of Rs. 500 every month by the Systematic Investment Plan (SIP).
    • The risk meter of the fund is streaming at a moderately high, with a risk score of 26.5 out of 50. So, considerably less volatile than the index.
    • The Quantitative fundamentals of the funds are,
        • Price to Earnings – 34.88.
        • Price to Book Value – 3.41
        • Earnings Per Share – Rs. 343.77 per Share
        • Dividend Yield – 1.33%
    • Top 10 Holdings covers 53.8% of the total fund.

Axis NIFTY 100 Index Fund – Performance:

Axis Nifty 100 Index fund vs Nifty 100 Index
Axis Nifty 100 Index Fund Vs Nifty 100 (from 08 Oct 2019 to 08 Oct 2020)

The above image could have shown a clear picture of the fund’s performance over the past year. It has failed to beat the index.

Here are a few glimpses of the fund’s performance over the period within a year.

    • 1 Month – 4.09% (Direct Plan); 4.02% (Regular Plan)
    • 3 Month – 9.83% (Direct Plan); 9.55% (Regular Plan)
    • 6 Month – 33.12% (Direct Plan); 32.59% (Regular Plan)
    • 1 Year – 2.41% (Direct Plan); 1.81% (Regular Plan)

The gap in low performance is due to the launch of the fund. The fund was launched at the time of high market P/E. The P/E was at 28 times the earnings at the time the fund was launched. But, the current P/E is even worse accounting for 34.88 times than earnings.

Since the fund is 1 year old, we can’t track the exact reason for not surpassing the Index. Let us have a look at the fund manager profile and other funds managed by them.

Fund Manager History:

The fund manager is Mr. Ashish Naik. He has about 7 years of experience as an Equity Analyst. Before AXIS AMC, he was associated with Goldman Sachs.

In Axis AMC, he manages almost 5 funds apart from Axis Nifty 100 index funds.

Those funds performance are,

  1. Axis Regular Saver Fund – 7% ( 5 Yrs Performance) vs 4.3% (category Average)
  2. Axis Triple Advantage Fund – 9.02% (5 Yrs Performance) vs 6.41% (Category Average)
  3. Axis Children’s Gift Fund – 7.48% (3 Yrs Performance) vs 2.7% (Category Average)
  4. Axis Capital Builder Fund – 11.12% (1 Yr Performance) vs 5.5% (Category Average)
  5. Axis Equity Hybrid Fund – 7.1 (1 Yr Performance) vs 6.3% (Category Average)

The fund manager has shown a super performance in all funds he manages. All the funds have overperformed the category benchmark.

So, hope he might bring back the performance the same as the Index level.

Insights for Investors:

    • The only reason, why the fund has not performed more than the Index is due to the launch period of the fund.
    • Fund has the lowest Expense ratio, this will be positive for the investors.
    • This is one of the best Index funds. But, this is not the correct time to enter into the equity market as P/E is 35 times than the earnings.
    • Once the earnings or market revives back. You can start your investments.

Have a look at Equity Mutual Funds – SIP or Lumpsum and Strategies to Pick Shares or Mutual Funds.