Axis MF Introduces Manufacturing NFO; CEO Gop Kumar Bhaskaran Discusses Growth Strategies In Exclusive Interview
In a strategic move to capitalise on India's burgeoning manufacturing theme, Axis Mutual Fund has announced the launch of the Axis India Manufacturing Fund. This open-ended equity scheme will represent the country's manufacturing sector, benchmarked against the Nifty India Manufacturing TRI. The New Fund Offer (NFO) is set to commence on 1 December 2023 and will run until 15 December 2023.
On the occasion of this significant announcement, Gop Kumar Bhaskaran, MD & CEO of Axis Mutual Fund, shared insights in an exclusive interview with BW Businessworld, shedding light on the company's investment strategies, commitment to investor protection, collaborations with fintech companies and innovative initiatives that define its trajectory in the mutual fund industry. Excerpts:
How do you prioritise and determine the investment strategies for Axis Mutual Fund?
The focus on the growth style remains predominant in most of our funds. While we do have both growth and value options, our emphasis is largely on growth, with the value fund being relatively small in comparison. A crucial metric guiding our approach is the quality of stocks, particularly the management quality within our portfolios. We take pride in maintaining one of the best standards in this regard.
We firmly believe that quality is a significant driver for achieving superior returns for investors. This approach has proven successful for us. Currently, we are making it clear that as a mutual fund platform, we offer different styles and it is up to advisors and investors to choose the style that aligns with their preferences.
For instance, our top four funds will persist with a growth style, while efforts are underway to strengthen our value fund. We are also working on establishing a robust hybrid strategy. Recently, we welcomed new fund managers to our team, particularly focusing on the hybrid side, with additions to the Arbitrage fund and the Balance Advantage fund. This strategic move underscores our commitment to maintaining a growth-oriented fund business, concentrating more on the fund's growth trajectory.
How do you ensure that the interests of investors are protected and aligned with the growth objectives of Axis Mutual Fund?
We maintain a clear focus on our risk and compliance frameworks. Our dedicated efforts in this area demonstrate our commitment to being a class apart in terms of investment. The decision regarding the manufacturing fund was not a spur-of-the-moment one; it was a well-thought-out process that spanned over the last year. Our position is further strengthened by our association with Axis Bank that adds an extra layer of reliability. Axis Bank’s significant shareholding emphasises the importance of aligning interests. Notably, 35 per cent of our Assets Under Management (AUM) currently originates from Axis Bank customers.
How does Axis Mutual Fund strategically integrate technology and financial expertise?
Our app stands out with a remarkable 4.7 rating in the Play Store, marking the highest in the mutual fund industry. Beyond being a transactional platform, our app embodies a solution-oriented approach, aligning seamlessly with our product offerings. Collaboration with fintech companies is a key focus, with our active engagement with nearly 50 fintechs.
Over the past three years, our expertise has grown through collaborations with fintechs, earning us a position as a preferred partner for digital banks. Our focus lies in advisory services, customer onboarding and enhancing customer engagement. Digital execution and customer retention are core aspects of our strategy.
As we reflect on the evolution of mutual funds, it's evident that the industry experienced exponential growth, capturing the market over the years. This growth trajectory underscores the dynamic nature of mutual funds and their pivotal role in the financial landscape.
Given the increasing array of investment prospects nowadays, what is your outlook on the mutual fund market's trajectory over the next five years?
The mutual fund industry in India presents a fascinating landscape, especially considering the relatively low participation rate of the Indian population in the markets, currently standing at a mere two and a half per cent from the perspective of Asset Management Companies (AMC) in the mutual fund business. This statistic highlights a substantial untapped potential, suggesting a vast headroom for growth within the sector.
The low penetration rate can be attributed to factors such as awareness, emphasising the need for concerted efforts to educate and engage a larger portion of the population in market investments. The ongoing digital transformation and formalisation of the economy also play crucial roles in shaping the landscape. As more individuals become part of the digital ecosystem, the financial sector stands out as a primary beneficiary.
The trajectory of the industry is further fuelled by a growing disposable income and an improving savings rate, currently standing at six to seven per cent. There's an optimistic outlook on the industry's future, considering its impressive Compound Annual Growth Rate (CAGR) of 19-20 per cent. The dynamic growth in the mutual fund sector indicates a promising trend, with larger AMCs likely to expand even more, supported by the ongoing formalisation of the economy. The mutual fund business emerges as a substantial beneficiary in this evolving economic landscape.
