28.6% We remain bullish on equities from a medium to long term perspective KEY HIGHLIGHTS

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1 EQUITY J A N U A R Y QUICK TAKE Equity market valuations are broadly reasonable adjusted for the cyclical low in earnings and potential for revival going forward. We remain bullish on equities from a medium to long term perspective KEY LIGHTS Investors are suggested to have their asset allocation plan based on one s risk appetite and future goals in life. DOMESTIC GLOBAL CORPORATE Equity markets ended the year with a stable 1 positive tick for the month on the benchmark indices S&P BSE Sensex & NIFTY 50. With this the S&P BSE SENSEX & NIFTY 50 returned 27.9 & 28.6 respectively for CY 17 on the back of a tepid NIFTY Midcap 100 Index returned 47.3 of the calendar year. Mid-cap indices outperformed the large caps for the fourth year running. FII`s were net sellers in December with a net outflow of US$1 billion. Domestic investors continued to remain bullish on the equity markets offsetting the foreign outflows. Overall, 2017 was one of the best years for mutual funds in recent years as the industry saw significant traction and mind recall amidst buoyant equity markets. The primary markets continued to remain active with large issues from leading financial institutions and supply from government`s divestment program. Fund raising from IPO`s & QIP`s in 2017 exceeded ` 110,000 Crores. GST numbers continued to remain lacklustre. Total GST collections for the month of November stood at ` 80,808 Cr. The government continued the GST rationalisation as part of its ongoing review of taxes on various products. Rates for 175 products were rationalized during the month. A notable point to note was that the government started releasing GST refunds to exporters giving a much needed relief to the sector. The government disclosed an additional market borrowing of ` 50,000 cr. via dated government securities and 23,000 Cr of T- Bill borrowing. The requirement could be attributed to the lower than expected GST numbers, lower dividend from the Reserve Bank of India and the government`s unwillingness to reduce spending on key projects. prices in India rose to a 15-month high in November due to the ongoing seasonal surge in vegetable prices and an unfavourable base effect from last year. Headline consumer price index (CPI) for the month of November moved up to 4.88 vis-à-vis previous month s reading of Brent crude prices increased 9.1 percent month-on-month during November further adding to inflation pressures. On the political front, victories in Gujarat and Himachal Pradesh offered comfort to the market. However, better than expected performance by opposition parties in the state elections, is likely to keep the ruling party on their toes in the run up to the assembly elections in Likely populist measures in the new year are likely to bring the focus on the rural consumption space. We continue to believe that the economy has the advantage of a solid macro foundation, which combined with structural reforms is likely to push growth higher in the medium term. However, transition times are always tricky to estimate, and thus it s easier to have conviction on the 2-3-year scenario than a 2-3 quarter one. The government`s focus on eliminating structural bottlenecks despite the tight fiscal balance is credible.

2 AXIS EQUITY FUND The fund focuses on delivering superior risk adjusted returns. The fund manager targets out-performance to the benchmark while delivering risk that is lower than the benchmark. Stocks are selected in the portfolio based on their ability to grow earnings on a sustainable basis from a medium term perspective while maintaining a highly liquid and risk managed portfolio. The expected earnings growth of the portfolio is higher than that of the benchmark Nifty. The strategy is to invest mainly in companies which operate in a secular growth segment and has leading market share in their areas of operation to provide steady returns and the remaining in companies that are gaining markets share due to differentiated offering or cost advantage, in large sectors expected to deliver alpha. The portfolio retains a distinct large cap bias with mid-cap exposure limited to around 20. For its midcap allocations, the portfolio looks to keep a high hurdle in terms of quality and growth potential. HDFC Bank Limited 9.6 Maruti Suzuki India Limited 8.5 Kotak Mahindra Bank Limited 7.2 Housing Development 6.8 Corporation Limited ICICI Bank Limited 4.4 Bajaj Limited Page Industries Limited 3.9 Hindustan Unilever Limited 3.3 Cement & Building Materials Information Bharti Airtel Limited 3.3 Bajaj Finserv Limited 3.1 AXIS LONG TERM EQUITY FUND (An open-ended Equity Linked Savings Scheme with a 3-year lock-in) The fund is focused on quality companies having strong long term earnings growth prospects. Thus the fund maintains a stable core portfolio with relatively low churn. Within that objective, the fund is comfortable looking past shorter term volatility in performance. With a medium to long term view towards capturing growth, the fund is biased towards stocks which can deliver superior returns. This includes private sector banks and NBFCs, autos and ancillary, housing & consumption sectors. Normally, the fund has avoided highly cyclical stories and highly regulated sectors. The fund looks at opportunities across the market cap and the portfolio remains balanced between its large and mid-cap allocations. HDFC Bank Limited 8.0 Kotak Mahindra Bank Limited 7.5 Housing Development 6.1 Corporation Limited Pidilite Industries Limited 5.8 Maruti Suzuki India Limited 5.7 Motherson Sumi Systems Limited Bajaj Limited 4.4 TTK Prestige Limited 3.7 Information Capital Goods, Eng. Avenue Supermarts Limited 3.6 Gruh Limited 3.3

3 AXIS MIDCAP FUND The fund focuses on investing in bottom-up stocks that provide potential to grow cash flows over the medium term. The portfolio seeks to add businesses with economic moats and distinct competitive advantage. The fund remains true-to-label in its portfolio allocations with a diversified and risk-managed mid-cap portfolio which has a superior liquidity profile. Page Industries Limited 6.0 Gruh Limited 5.9 City Union Bank Limited 4.7 Procter & Gamble Hygiene and 4.4 Health Care Limited Endurance Technologies Limited 4.4 Bajaj Limited V-Guard Industries Limited Mahindra & Mahindra Financial 3.2 Services Limited Capital Goods, Eng. Agro Inputs & Chemical Sundaram Limited 3.1 Supreme Industries Limited 3.1 AXIS FOCUSED 25 FUND The fund manager runs a high conviction portfolio, containing the fund manager s best ideas and invests in upto 25 stocks while ensuring reasonable diversification and focus on quality and risk management. The portfolio has a large cap bias with more than 90 of the portfolio invested within the Top 200 stocks by market capitalization. The fund manager looks at 3 broad buckets while constructing the portfolio. The core portfolio consists of steady compounders that can generate reasonable returns with low volatility. 2 other buckets consist of companies having a cyclical tailwind and emerging themes with high growth potential. Kotak Mahindra Bank Limited 7.9 HDFC Bank Limited 7.8 Maruti Suzuki India Limited 7.2 Shree Cements Limited 7.1 Supreme Industries Limited 5.4 Bajaj Finserv Limited Page Industries Limited Motherson Sumi Systems Limited 4.4 Info Edge (India) Limited 4.1 Capital Goods, Eng. Cement & Building Materials Bajaj Limited 4.0

4 AXIS MULTICAP FUND Good ideas can do better irrespective of its sector/theme/size. Axis Multicap Fund seeks to invest across the market cap spectrum in high conviction ideas with improved risk- adjusted return characteristics. The fund manager looks for stocks that are expected to report faster growth relative to the benchmark. The fund as such is sector agnostic and focuses on a bottom up approach to invest in stocks that are at an inflection point such as market share gain, industry consolidation, sunrise industries, improved management focus and capital allocation or regulatory & policy changes. HDFC Bank Limited 9.7 Maruti Suzuki India Limited 5.3 Bajaj Limited 5.0 Bharti Airtel Limited 4.0 Mahindra & Mahindra Financial 3.3 Services Limited Kotak Mahindra Bank Limited Avenue Supermarts Limited Hindustan Unilever Limited 2.4 Information Telecom Infosys Limited 2.4 Motherson Sumi Systems Limited 2.2

5 Axis Equity Fund (Open ended Large Cap Equity Scheme) Investment in a diversified portfolio predominantly consisting of equity and equity related instruments of large cap companies Axis Long Term Equity Fund (an open-ended equity linked savings scheme with a 3 year lock-in) Capital appreciation & generating income over long term Investment in a diversified portfolio predominantly consisting of equity and equity related instruments Axis Midcap Fund (an open-ended equity scheme) Investing predominantly in equity & equity related instruments of mid size companies with focus on relatively larger companies within this category Axis Focused 25 Fund (an open-ended equity scheme) Investment in a concentrated portfolio of equity & equity related instruments of up to 25 companies Axis Multicap Fund (An open-ended equity scheme investing across large cap, mid cap, small cap stocks) Capital appreciation over medium to long term Investment in a diversified portfolio consisting of equity and equity related instruments across market capitalization Data as on 29th December Source of data: Bloomberg, ACEMF 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). This document should not be construed as research report. 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 ` 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. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.