Hello Readers!
COVID-19 pandemic brought many changes in our lifestyle, people started taking out time for their own health. As physical socializing was prohibited in this pandemic, a prominent change was seen in the work-life. We were working from home using the home internet extensively, transacting online, despite living in far-flung areas.
Many companies were opened for their employees after Unlock Phase 1, was announced, however, there are some companies that have brought a change in the way they work forever. The changes in technologies also led many companies to bring change in the way they conduct business.
This change in way of working was taken as an opportunity by the Axis Mutual Fund and recently they announced their new NFO, Axis Special Situations Fund (ASSF). This NFO aims to spot such companies, invest in them, and then ride on their success.
Axis Special Situations Fund (ASSF), The New NFO!
It is a kind of thematic fund, that aims to invest in companies facing special situations. These companies might be changing the way they work due to regulatory or policy changes, management restructuring, technology-led disruption, innovation, or any temporary challenges in the operating environment.
This scheme will focus 30% of its investment in overseas stocks. Ashish Naik and Hitesh Das will take up the charge of this fund as a fund manager. The performance of the fund will be benchmarked against the Nifty 500 TRI. The new fund offers close on December 18, 2020.
What Strategies Will Work Out?
ASSF (Axis Special Situation Fund) will focus its investment prominently in any of the two companies, either company that caused disruptions or companies that have adapted well to disruptions. In addition, it will also focus on companies that would go changes in their way of working and functioning that are expected to emerge out well.
The fund will be managed in the way multi-cap funds are and for its international diversification, it will draw expertise from the Schroder Global Disruption Team – a part of Schroder, a global fund house and a shareholder of Axis AMC.
International diversification is being followed by many of the NFO funds this year since there are a lot of global companies that have benefited from disruption. Similarly, the ASSF fund will also focus on international diversification, however, it will focus mainly on technology companies across Asia, that have good growth prospects over the long-term.
What Strategies Won’t Work?
The fund will invest at least 70 percent of the assets in Indian markets. The challenge is to find enough companies that fit the bill in India. That’s one thing investors will keep an eye out for.
Our Overview!
The disruption caused by technology and even by factors such as COVID-19 is not a short-term theme. It will unfold over a long period of time. Companies that have changed the way they work and adapted quickly, would do well.
But here I would say that the strategy is a bit risky, especially for the newbie investors. When exactly a company’s adaptability turns profitable would also weigh on this strategy. This scheme is best suitable for savvy investors, but even they should wait for more time so that ASSF builds a track record in identifying such companies.
For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).