Axis AMC Core & Satellite
Axis AMC PMS | Equity | | PMSIME's View on Axis AMC Core & Satellite
Strategy
Investment Fund
Can wait it out as it is not recommended at this stage as the portfolio is young, the value of the strategy loose and don't know of the implementation of the strategy. We also prefer owner-managed AMCs since the risk of churn at the senior team level is low. Axis recently saw Trideep Bhattacharya leave the AMC, replaced by Hitesh Zaveri.
Fund's Strategy View
No clearly defined investment philosophy at the PMS level, not sure how strictly the strategy is being implemented.
Fund Performance
The fund has underperformed peers & is amongst the worst performing schemes in this category in the last 5 year trailing returns. In terms of longer-term annual performance, performance consistency is weak, with the fund having underperformed it's benchmark in more years than having outperformed.
IME's View on Axis AMC PMS
View on AMC
Axis AMC PMS faces common issues found in large MF-driven PMS firms, such as PMS being treated as an add-on instead of a separate business unit, high turnover in the investment team, lack of commitment from the CIO, and vague investment philosophies. While the AMC's distribution abilities can aid in scaling the PMS and provide research access, it is often not as strong as founder-driven PMS firms with a dedicated CIO.
AMC's Pedigree
Axis AMC is a top 10 asset manager in India known for managing mutual fund assets. While being part of a larger asset management house has benefits like a central research team and distribution strengths, the pedigree of an AMC-driven PMS may not compare to investor-cum-promoter driven PMS's with stable investment teams and defined investment processes.
AMC Team
AMC's top leadership has changed from Trideep Bhattacharya to Hitesh Zaveri, both experienced investment professionals in the alternate space. This turnover in leadership is a common issue with AMC-driven PMSs lacking substantial equity ownership by the core FM.
Investment Philosophy
Investment philosophy is not clearly defined at the PMS level; strategy is driven at the portfolio level instead.
Axis Core & Satellite- Investment Strategy
Axis’s Core & Satellite strategy aims to create a portfolio that has a blend of 2 investing styles: – Core: fundamentally strong businesses with a strong brand – Satellite: cyclical businesses with a strong track record of superior capital allocation.Investment Thesis
Core Allocation: Following concept of Brand investing (50-70%) by identifying- Businesses having strong BRAND presence, steady compounder which are held for long term (5 years+). Core also provides stability in the portfolio as stock are relatively low beta in nature. Satellite Allocation: Based on the concept of Efficient Capital Allocators (30%-50%) Identifying companies having a track record of superior capital allocation, identifying stocks which have element of cyclicality in earnings and are currently mispriced opportunities. Satellite allocation can act as a return 'kicker' and stocks held with medium term view (18-24 months).Investment Process
Creating an Investment universe by following a Quantitative and Qualitative screeners . The investment universe is created by firstly looking for a Brand Universe and Capital allocators universe. Brand universe futher on utilises a Brand Filter. Quantitative Screeners includes the Brand universe by using the following filters:- Brand Filter- significant brand investment (advertising, marketing, communication, royalty, R&D expenses). As well as growth> GDP Growth and Returns> Cost of capital.
- Past Capital Allocation Behavior- on the basis of non-finance - focus on positive cash accruals which covers investment needs over sustained period. As well as on the basis of Finance- capital deployed to efficient use, generate superior returns with an eye on risk.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Axis AMC Core & Satellite | -10.3 | 12.4 | 15.2 | 11.8 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 14.5 |
| Alpha over Broad Mkt BM | -3.7 | -2.3 | -4 | -2.7 |
Performance as of: 30-Sep-25 | Inception Date: 11-Nov-19 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Hitesh Zaveri | 3-star rated FM
Head - Listed Equity Alternatives | 25 yrs Experience | 4 yrs at current firm
Past Experience: Plutus Capital, OSF Capital, Birla AMC, Enam AMC
Hitesh Zaveri joined Axis AMC in 2022 as SVP & Head – Listed Equity Alternatives. He is responsible for managing the Axis PMS portfolios along with relevant CAT-3 AIF strategies. Hitesh has over 25 years of experience in portfolio management, investment banking and equity research. Prior to joining Axis AMC, he served as Head of Investments in the PMS business at Aditya Birla Mutual Fund. He has pursued his MBA from Mumbai University, and has also completed a few programs from the Harvard Business School and from The Wharton School.
