Axis Momentum Fund – Direct (G) : NFO Details

The Axis Momentum Fund – Direct (G) is designed to offer investors an opportunity to achieve longterm capital appreciation by investing in a diversified portfolio of equity and equityrelated instruments. The fund actively identifies companies that demonstrate robust momentum characteristics, focusing on those with a consistent upward price trajectory and favourable market dynamics.

To ensure a systematic and efficient selection process, the portfolio is constructed using a quantitative model that evaluates and ranks securities based on multiple momentumrelated parameters. This modeldriven approach seeks to maximize exposure to stocks with strong momentum trends while maintaining diversification to reduce risks. By leveraging datadriven insights, the scheme aims to provide an optimal balance of growth and stability, catering to investors looking for dynamic investment opportunities aligned with market momentum.

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Details of the NFO: Axis Momentum Fund – Direct (G)

Investment Objective and Strategy

Objective:

The Axis Momentum Fund – Direct (G) aims to provide longterm capital growth from an actively managed diversified portfolio of equity & equityrelated securities of companies that exhibit strong momentum. The selection of securities will be based on a quantitative model that will aim to maximize momentum exposure based on various parameters.
There is no assurance that the investment objective of the scheme will be achieved.

Investment Strategy:

The Axis Momentum Fund – Direct (G) follows an active investment strategy.
The Scheme aims to provide long term capital growth from an actively managed diversified portfolio of equity & equity related securities of companies that exhibit strong momentum. Momentum investing is essentially based on owning a portfolio of securities that have shown favourable price trends across different time horizons. Momentum strategy could be based on various parameters including price, growth and/or return signals.

The first step of our investment process commences with liquidity analysis and data availability. Thereafter various qualitative and quantitative screeners may be applied to exclude companies that, we believe, do not meet our criteria of quality.

Once the universe is finalized, we will use our proprietary quantitative model to rank stocks based on momentum. The quantitative model calculates the momentum score using any one or more metrics. For e.g. the fund may consider price based momentum strategy where the price and/or total returns of the stock across different time horizons may be considered. The fund manager will then take the output from the model and based on his views of the current market dynamics select stocks & its weights in the portfolio to construct the final portfolio at his discretion so as to maximize momentum exposure subject to constraints like security level exposure and other risk limits as applicable. The fund manager will aim to regularly monitor and rebalance the portfolio to ensure alignment with the momentum strategy. Our proprietary quantitative model will also be regularly monitored and reviewed for updating in line with evolving market trends and data. The Fund Manager can change the quantitative and qualitative parameters by addition or deletion of the parameters, so as to optimize returns.

The fund manager may at his discretion invest up to 20% of the scheme assets outside the momentum theme based on his qualitative and quantitative assessment of the investment opportunities.

Risk associated with Axis Momentum Fund – Direct (G)

The risks associated with derivatives are similar to those associated with underlying investments. The additional risks of using derivative strategies could be on account of:

Illiquidity;

• Potential mis  pricing of the Futures/Options;
• Lack of opportunity;
• Inability of derivatives to correlate perfectly with the underlying (Indices, Assets, Exchange Rates);
• Cost of hedge can be higher than adverse impact of market movements;
• An exposure to derivatives in excess of the hedging requirements can lead to losses;
• An exposure to derivatives can also limit the profits from a genuine investment transaction;
• The prices which are seen on the screen need not be the same at which execution will take place.

For detailed risks associated with use of derivatives, please refer paragraph “Scheme Specific Risk Factors”.

Exchange traded derivatives Contracts in stocks and indices in India are currently cash settled at the time of maturity.
Derivatives allowed for mutual funds are only exchange traded and not OTC.

Who Should Invest in Axis Momentum Fund – Direct (G)?

The Axis Momentum Fund – Direct (G) is well suited for investors seeking long term capital growth through a data driven, momentum based equity investment approach. It is ideal for individuals with a moderate to high risk appetite who are comfortable with the potential volatility associated with equity markets and momentum investing. 

This fund caters to investors who:

1. Seek Higher Returns: Those looking to capitalize on companies demonstrating strong price or performance trends over varying time frames.

2. Prefer Data Driven Strategies: Investors confident in quantitative, modeldriven approaches to portfolio construction and stock selection.

3. Are Comfortable with Dynamic Allocation: Those who appreciate active management, regular rebalancing, and evolving market dynamics for optimal exposure.

4. Have a Diversified Investment Portfolio: Investors aiming to complement their existing equity or diversified investments with momentum focused exposure.

It may not suit conservative investors or those unwilling to manage risks inherent to equity markets and derivatives.