3 dimensional view of Fixed Income Market - Axis MF · • We do not foresee a significant rally on the back of lingering fiscal issues and poor demand supply dynamics. • RBI is

3 dimensional view of Fixed Income Market

Copyright 2018 | Axis Mutual Fund2

• Duration play seems to be over.

• Long bonds likely to trade in a narrowrange & hence limited opportunities inthis space.

• We do not foresee a significant rallyon the back of lingering fiscal issuesand poor demand supply dynamics.

• RBI is expected to continue assetpurchases in an attempt to maintain aneutral liquidity environment.

Current Portfolio Allocation is based on the prevailing market conditions and is subject to changes depending on the fund manager’s view of the fixed income markets.

Good opportunity to position the portfolio of corporate

bonds and money market in the range of 3 months to 3 years

Accrual

Liquidity

Duration

Rising Crude prices & currency depreciation will likely stoke imported inflation fears

Copyright 2018 | Axis Mutual Fund 3

Source: Bloomberg. Data as on 2nd July 2018

63

64

65

66

67

68

69

70

USD/INR

Depreciating currencyRising Crude prices

45

50

55

60

65

70

75

80

Crude – Brent ($/barrel)

0

25

50

75

100

125

150

175

200

225

250

275

1Y AAA Spread over Repo

0

25

50

75

100

125

150

175

200

225

250

275

3Y AAA Spread over Repo

Source : Bloomberg

1-3 year corporate bonds space looks attractive


Spreads at 3 yr highsSpreads at 3 yr highs

Repo Under LAF raised to 6.25%

Valuation of State Government Securities

Increase in Liquidity Coverage Ratio (LCR) carve-out from

Statutory Liquidity Ratio (SLR)

Market View


Source: RBI 2nd Bi Monthly Policy Review FY 2018-19, Axis MF Research

• Markets seem to have priced in 50 basis rate hikes till March

2019

• We do not expect any significant rally due to fiscal worries

and weak demand supply dynamics

• On a risk reward basis, the short end of the curve remains

attractive as compared to long end of the curve

• Short term corporate bonds offer lucrative opportunities with

elevated yields and lower volatility

• Stay invested in short to medium term strategies and actively

look at credit funds

Policy Action

Axis Dynamic Bond Fund

6

Allocation & maturity is based on the current market conditions and is subject to changes depending on the fund manager’s view of the markets. ^The yield to maturity given above is based on the portfolio of funds as on date given above. This should not be taken as an indication of the returns that maybe generated by the fund and the securities bought by the fund may or may not be held till their respective maturities. The calculation is based on the invested corpus. #High Rated Papers refers to instruments which are rated AAA/A1+ & equivalent or G-sec

Invests in

best ideasDynamically

allocates across all segments

Active duration management

Portfolio Characteristics (as on 30th June, 2018)

Average Maturity 3.3 years

Modified Duration 2.5 years

Yield to Maturity^ 8.45%

Average for the last 1 year

Allocation to High Rated

Papers#77.4%

Allocation to G-Sec 38.3%

Copyright 2018 | Axis Mutual Fund

Dynamically managed maturity profile

7

Allocation & maturity is based on the current market conditions and is subject to changes depending on the fund manager’s view of the markets. Source of data: ACEMF. The fund above is Axis Dynamic Bond Fund

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-15 Jun-16 Jun-17 Jun-18

Asset Allocation Mix and Average Maturity

Average Maturity (years)

Corporate Bonds

G-Sec

Money Market Instruments PTC


Performance as on June 30th, 2018

8Copyright 2018 | Axis Mutual Fund

Annexure

9

Annexure for returns of schemes managed by fund manager


Annexure

10



Annexure

11



Annexure

12

Performance Disclaimers

#Scheme Performance may not be strictly comparable with that of its additional benchmark in view of hybrid nature of the scheme.

@@The performance data for 5 years period has not been provided for scheme/plan not in existence for 5 years. @The performance data

for 3 years period has not been provided for scheme/plan not in existence for 3 years. The performance of the scheme is benchmarked to

the Total Return variant of the Benchmark Index (TRI) in terms of SEBI circular dated Jan. 4, 2018. Data as on June 30, 2018.

Past performance may or may not be sustained in future. Calculations are based on Growth Option NAV. Since inception returns are

calculated on Rs. 2,026.8384/- for Gold ETF & `10/- for all other schemes. Different plans have different expense structure. Plan of the

scheme for which performance is given is indicated above.

The above data excludes performance of Fixed Maturity Plans and all the schemes which have not completed a year. Top 3 and Bottom 3

schemes (based on 1 year performance) managed by Devang Shah has been provided herein.

Devang Shah is managing Axis Liquid Fund, Axis Dynamic Bond Fund, Axis Gilt Fund , Axis Strategic Bond Fund and Axis Short Term Fund

and all Axis Hybrid Funds since 5th November 2012 (since inception date for Axis Hybrid Funds launched after 5th November, 2012), Axis

Credit Risk Fund and Axis Arbitrage Fund since inception and Axis Treasury Advantage Fund and Axis Regular Saver (Debt portion), Axis

Gold Fund, Axis Gold ETF , all Axis Fixed Term Plans since 7th June, 2016 (since inception date for Axis Fixed Term Plans launched after

7th June, 2016) and Axis Corporate Debt Fund since July 13th, 2017.

R. Siva Kumar is managing Axis Dynamic Bond Fund, Axis Equity Saver Fund (debt potion), Axis Capital Protection Fund – Series 5 and

Axis Dynamic Equity Fund since inception, Axis Triple Advantage Fund since 14th September 2010 and Axis

Children’s Gift Fund (debt portion) since 7th June 2016.


Product Labelling

13

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Fund Name Riskometer Product Labelling

Axis Capital Protection Oriented Fund

– Series 5(A 42 months close ended capital protection

scheme)

This product is suitable for investors who are seeking*

• Capital appreciation with low risk of capital loss over

medium to long term

• Investment in debt and money market instruments as

well as equity and equity related instruments

Axis Gilt Fund(An open ended debt scheme investing in

government securities across maturity)


• Credit risk free returns over medium to long term

• Investment mainly in Government securities across

maturities


• Optimal returns over medium to long term

• To generate stable returns while maintaining liquidity

through active management of a portfolio of debt and

money market instruments.

Axis Dynamic Bond Fund(An open ended dynamic debt scheme investing

across duration)


Product Labelling

14



Axis Hybrid Fund Series – 5, 22,23,24(42 months close ended debt scheme)


• Capital appreciation while generating income over

medium to long term.

• To Investment in debt and money market

Instruments as well as equity and equity related

Instruments


Product Labelling

15



Axis Equity Saver Fund(An open ended scheme investing in equity,

arbitrage and debt)


• Capital appreciation while generating income over

medium to long term

• Provide capital appreciation and income distribution

to the investors by using equity and equity related

instruments, arbitrage opportunities, and investments

in debt and money market instruments

Axis Children`s Gift Fund(An open ended fund for investment for children,

having a lock-in of 5 years or till the child attains

age of majority (whichever is earlier)


• Capital appreciation & generating income over long

term

• Investment in debt and money market instruments as

well as equity and equity related instruments


• Capital appreciation & generating income over long

term.

• Investment in a diversified portfolio of equity and

equity related instruments, fixed income instruments

& gold exchange traded funds.

Axis Triple Advantage Fund(An open ended scheme investing in equity, debt

and gold)


Statutory Details and Risk Factors

Disclaimer: Past performance may or may not be sustained in the future. Sector(s) / Stock(s) / Issuer(s) mentioned above are for the

purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as recommendation. The fund manager(s) may or may

not choose to hold the stock mentioned, from time to time. Investors are requested to consult their financial, tax and other advisors before

taking any investment decision(s).

Data as on June 30th 2018 unless specified differently

Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd.

(liability restricted to Rs. 1 Lakh).

Trustee: Axis Mutual Fund Trustee Ltd.

Investment Manager: Axis Asset Management Co. Ltd. (the AMC)

Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision.

Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates

shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No

representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The

AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Mutual Fund Investments are subject to market risks, read all scheme related documents

carefully.

16Copyright 2018 | Axis Mutual Fund

Thank You

Documents

3 dimensional view of Fixed Income Market - Axis MF · • We do not foresee a significant rally on the back of lingering fiscal issues and poor demand supply dynamics. • RBI is