Axis Brand Equity Portfolio

What is a Brand?

A symbol or design that expresses values and identities.

• Assures customers regarding product/service quality
• Tool for creating competitive advantage
• Provides confidence to purchase decision of the buyer
• Enhances customer experience

Why Invest in Brands?

Brand Attributes

Brand Resonance Pyramid – Journey Through Stages

• Brand Relationship – Companies aspire to establish a personal connection or bond with consumers to gain loyalty.
• Brand Identity – Clear identification of the brand by consumers and association with a product or need.
• Brand Meaning & Response – Brand must fulfil consumers’ functional, social and psychological needs.

Brand Value for Consumers

Brand Perceived Value

Investment Philosophy

Fund Focus

Investment Approach - InDynamix

Frameworks in Investment Approach - ValueTrack

Diversification Across Sectors

• While portfolio will consist of bottom-up best ideas, portfolio construction will target reasonable diversification across sectors.
• Given the theme, certain sectors are likely to be more represented than others.

Risk Management is Central to the Investment Process

Axis Brand Equity Performance

Portfolio Details as on 31st Mar 2024

Portfolio Features

Fee Structure

Option 1: Fixed Management Fee

• Investment type: Lump sum (50 Lakhs or more at a PAN level)
• Fixed Management fee: 2.5% (charged on a quarterly basis)

Option 2: Fixed Management Fee with STO Option

• Investment type: STO with 5/10 instalments (50 Lakhs or more at a PAN level)
• Fixed Management fee: 2.5% (charged on a quarterly basis)

Option 3: Fixed + Variable Management Fee

• Investment type: Lump sum (50 Lakhs or more at a PAN level)
• Fixed Management fee: 1.5% (charged on a quarterly basis)
• Variable fee: 20% over the hurdle rate of 12%

Option 4: Fixed + Variable Management Fee with STO Option

• Investment type: STO with 5/10 instalments (50 Lakhs or more at a PAN level)
• Fixed Management fee: 1.5% (charged on a quarterly basis)
• Variable fee: 20% over the hurdle rate of 12%

Investment Approach

Investment Objective

To generate long term capital appreciation by investing in a diversified portfolio of equity instruments of companies with brands.

Investment Strategy (Basis of Selection of Securities)

Axis ‘Brand Equity’ Portfolio is a compact portfolio investing in equity that endeavors to achieve long term capital appreciation through investment in companies with established and emerging brands.

The allocation will consist of best ideas within this space. While the portfolio will consist of bottom-up best ideas, portfolio construction will target reasonable diversification across sectors. Investments will be across market capitalizations.

The Portfolio Seeks to Buy Businesses With Strong Brands That Provide:

• Sustainable competitive advantage
• Capable management team
• Good corporate governance

The Portfolio Manager does not indicate any guarantee for capital or returns.

Strategy

• Equity

Benchmark

• Nifty 50 Index TRI

The portfolio’s strategy is to invest in a diversified portfolio of companies across sectors. The fund manager finds it most suitable as per the strategy and it is the closest benchmark among the APMI circular list of benchmarks.

Asset Allocation and Type of Securities

• Equity & Equity Related Instruments: 80%-100%
• Debt & Money Market Instruments: 0%-20%

Strategy-Specific Risk Factors

Evaluation of companies from a brand perspective may exclude securities of certain issuers for non-investment reasons and therefore the strategy may forego some market opportunities available to strategies that do not fit the brand theme.

Stocks of companies with brand attributes may shift into and out of favor with stock market investors depending on market and economic conditions, and the strategy’s performance may at times be better or worse than the performance of stocks that do not have brand attributes.

To know more details and other risk factors associated with the investment approach, please refer to the Disclosure Document on our website – www.axisamc.com and Contribution Agreement.

Fund Manager Profile

Hitesh 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.

Hitesh has also worked with Enam Asset Management as Executive Director & Portfolio Manager and Edelweiss Capital as Senior VP & Co-Head of Institutional Research. He has managed large equity funds, authored research reports and executed a number of transactions in M&A, IPO and IB assignments that involved restructuring and delisting in his past roles.

Hitesh has contributed his research to a book co-authored by two Harvard Business School Professors - ‘Wall Street Research – Past Present & Future’, co-authored by Prof. Boris Groysberg and Prof. Paul Healy, published by Stanford Press.

Qualification

MBA from Mumbai University. Hitesh has also completed Advanced Management Program, Investment Management Program, and General Management Program from the Harvard Business School and Executive Development Program from The Wharton School. He is also an alumnus of Harvard Business School and an Advisor to the Board of HBS Club of India.