How Axis Mutual Fund plans to turn around its ship now
New folks at the helm Early this year, B. Gopkumar took over as the chief executive officer (CEO) and Ashish Gupta as its new chief Investment Officer (CIO) . This was followed by the exit of Jinesh Gopani as head of equity in August.
Shortly after, the firm elevated fund manager Shreyas Devalkar to this role. The fund house now plans to hire a chief risk officer (CRO), chief financial officer (CFO), and a new chief operating officer (COO). The overarching theme here is to ensure that there is no concentration of power in a single individual.
The new CIO also plans to hire several fund managers who employ different styles such as growth at a reasonable price (GARP), value, and quant. Some have already been appointed. For instance, Karthik Kumar now runs Axis Quant Fund.
More importantly, Gupta will give fund managers functional independence rather than impose his own style on them. What happens to growth style? Earlier, Gopani was both CIO and the head of equity. His signature growth style had given Axis MF its stellar outperformance in 2018-20 and propelled its rise, briefly as India’s largest fund house on the equity side (it is now the fourth largest).
However, this style ceased to be effective after 2021, causing the fund to underperform. The key schemes of Axis MF, namely Axis Long Term Equity and Axis Bluechip, were characterized by Gopani’s growth style. These were concentrated portfolios of high-growth stocks which trade at high valuations.
When growth was scarce and concentrated among a few players in 2018-20, it paid off. However, in the post-Covid broad-based market, it failed. Growth stocks lost their premium and value stocks caught up.
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