AXIS EQUITY SAVER FUND. Open Ended Equity Scheme

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1 AXIS EQUITY SAVER FUND Open Ended Equity Scheme

2 A primer on asset allocation

3 Avoiding common traps faced in equity investments Timing the market Chasing the hottest trend Focusing on schemes not portfolio Cycles of greed and fear

4 Why do Asset Allocation? Freedom from market timing Portfolio diversification reduces risk Lower volatility of returns i.e., Stable returns over a medium term Tailors the portfolio to your risk profile

5 What is Asset Allocation? Process of diversifying your investments across a range of assets - equity, debt, money market Strategy aims to balance risk with return by distributing into investments that have a low correlation with each other Correlation Equity and Bonds 8% Equity and Cash 3% Bonds and Cash 15% Period: April Equity: Nifty 50 Bonds: Bonds: I Sec Sovereign Bond Index, Cash: Crisil Liquid Fund Index. Source of data: Bloomberg Note: This is historical data. Past performance may or may not be sustained in future.

6 How does volatility affect investments? If the markets fall by Increase required to recover -10% 11% -15% 18% -20% 25% -25% 33% -50% 100% -80% 400% Higher the fall, larger is the increase required to recover! Above data is for illustration purpose

7 Portfolio needs to balance both risk and return In order to get the optimal outcome, investors need to either maximize expected return based on a given level of risk OR minimize risk based on a given level of expected return

8 Why combine debt and equity? Equity has, traditionally, given higher return than debt in 7 out of last 10 calendar years^ However the risk of losing money over shorter periods is much higher for equity than debt Multi-asset portfolio benefits from growth potential but cuts down the risk of losses Potential for higher return than debt funds Lower risk of losing money as often as equity Can a multi-asset portfolio be made available with an efficient tax structure? Data: ACEMF Note: Equity refers to Nifty. 50. Debt refers to ISEC Sovereign Bond Index. ^Returns are calendar year returns. Since 2004, Nifty 50 Index outperformed ISEC Sovereign Bond Index in every calendar year except 2008, 2011and 2015.

9 Introducing Axis Equity Saver Fund Endeavour to generate capital appreciation and income distribution, by investing in equity, arbitrage opportunities and debt Capital Appreciation Equity All-cap strategy (20-45% of the portfolio) Regular Income Fixed income Invest dynamically across the yield curve (20-35% of the portfolio) Stability Hedged Equity/ Cash futures arbitrage (20-60% of the portfolio)

10 Asset Allocation + Tax Efficiency Aims to better portfolio returns with potential for capital growth Equity(20-45%) Actively managed diversified portfolio of strong growth companies Tax efficient Hedged Equity/Cash-futures arbitrage (20-60%) Make advantage of market inefficiencies Gross equity exposure of % Endeavours to provide regular income and adds stability to the portfolio Debt(20-35%) High quality papers with portfolio duration based on interest rate view

11 Potential Returns Axis Equity Saver Fund Relative positioning Equity Balanced Axis Equity Saver Fund MIP Debt Risk Debt: I-sec Sovereign Bond Index, MIP: Crisil MIP Blended Index, Balanced: Crisil Balanced Fund Inex, Equity: Nifty 50 Index. Above representation is for illustration purpose.

12 Multi asset strategy v/s single assets Period : 2 yr rolling returns Equity Bonds Crisil Liquid Fund Index* Model portfolio % 5% 4% 18% % 2% 4% 11% % 6% 5% 18% % 6% 7% 22% % 17% 8% 3% % 9% 7% 4% % 0% 5% 18% % 6% 7% 2% % 9% 8% 5% % 7% 9% 12% % 10% 9% 13% % 13% 9% 12% Model portfolio has performed second best majority of the times over the last decade Source: AMFI Portal, Bloomberg, ACEMF. Data period : Apr 2002 to Dec Model portfolio: 40% Nifty 50 Index + 35% I-sec Sovereign Bond Index + 25% Crisil Liquid Fund Index (The arbitrage component of the representative portfolio is benchmarked to Crisil Liquid Fund Index), Equity: Nifty, 50; Bonds: I-Sec Sovereign Bond Index, *The arbitrage component of the model portfolio is benchmarked to Crisil Liquid Fund Index. All returns annualized. Above data is only for illustration purpose and does not indicate any expected returns from the fund. Past performance may or may not be sustained in future

13 Diversification provides stability and improves the risk-return mix 70% 50% 30% 10% -10% -30% 59% -5% 18% Period : 3 yr rolling returns 25% 14% 9% 12% 8% 7% 2% 4% 3% -50% Equity Bonds Crisil Liquid Fund Index* Model Portfolio Source: AMFI Portal, Bloomberg, ACEMF. Data period : Apr 2002 to Dec Model portfolio: 40% Nifty 50 ndex + 35% I-sec Sovereign Bond Index + 25% Crisil Liquid Fund Index (The arbitrage component of the representative portfolio is benchmarked to Crisil Liquid Fund Index), Equity: Nifty 50, Bonds: I-Sec Sovereign Bond Index, *The arbitrage component of the model portfolio is benchmarked to Crisil Liquid Fund Index. All returns annualized. Above data is only for illustration purpose and does not indicate any expected returns from the fund. Past performance may or may not be sustained in future

14 Limiting Drawdown Across market cycles 0% -10% -20% -30% -40% -50% -60% Equity Model portfolio -70% Apr-02 Aug-03 Dec-04 Apr-06 Aug-07 Dec-08 Apr-10 Aug-11 Dec-12 Apr-14 Aug-15 Past performance may or may not be sustained in future. Source: ACEMF, Model portfolio: 40% Nifty 50 Index + 35% I-sec Sovereign Bond Index + 25% Crisil Liquid Fund Index (The arbitrage component of the representative portfolio is benchmarked to Crisil Liquid Fund Index), Equity: Nifty 50. Drawdown is the measure of the decline from a historical peak in index value/nav at a given point in time. Data updated upto 31 st Dec 2015.

15 Style Discipline Fundamentals Based Research Driven Investment Strategy Equity The fund can invest across market capitalization Focus on quality stocks with sustainable growth potential Endeavor to add value to the investor s returns in the long run Sustainable growth Investment decisions are an output of a logical and disciplined investment process Investment process utilizes Bottom up approaches to identify fundamentally sound companies Investment decisions are driven by extensive macroeconomic and company research

16 Investment Strategy Fixed Income Fixed income portion of the portfolio can invest across the yield curve Aim to capture market inefficiencies and benefit from market volatility Seek to provide stability to investor s portfolio and limit the downside Interest Rates Interest rate view based on macro-economic analysis Analysis of market valuation (yields, spreads) in context of macro environment Credit We subscribe to the view that in credit risk, it is better to avoid losers than trying to pick winners Credit analysis of companies to arrive at an Investment Universe Focus on maintaining high credit quality of the portfolio

17 Portfolio Update 31 st May 2016 Portfolio Characteristics: Average Maturity Modified Duration 6.4 years 4.1 years Top 10 Stocks % of NAV Larsen & Toubro Limited 3.6 HDFC Ltd 3.5 Kotak Mahindra Bank Limited 3.3 Yield to Maturity^ 7.94% Motherson Sumi Systems Limited % of the Fixed Income portion is in AAA/SOV or equivalent rated papers HDFC Bank Limited 2.9 Tata Consultancy Services Limited 2.7 Maruti Suzuki India Limited 2.4 Total Unhedged Equity Sun Pharmaceuticals Industries Limited 2.1 Total Hedged Equity Nestle India Limited 1.7 Debt, Cash and Other Receivables Pidilite Industries Limited 1.7 Allocation & maturity is based on the current market conditions and is subject to changes depending on the fund manager s view of the markets. ^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. 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).

18 Tax benefit For investments up to 1 year Tax free dividends * Monthly, Quarterly div options available Capital Gain 15%* For investments more than 1 year Tax free dividends* Monthly, Quarterly div options available NO CAPITAL GAIN TAX Illustration : For investment period of more than 1 year Debt Oriented Funds Equity Oriented Funds Pre-tax rate of return 9% 9% Applicable tax rate* 33.99% 0 Investment (Rs.) 1,000,000 1,000,000 Capital gains (Rs.) 90,000 90,000 Taxable gain (Rs.) 90,000 0 Tax payable (Rs.) 30,591 0 Post tax return 5.94% 9.00% Please consult your tax adviser with respect to the specific tax implications

19 Benefits of investing in Axis Equity Saver Fund Aims to benefit from asset allocation & diversification Endeavors to take advantage of growth and stability at the same time Helps in leveraging on tax benefits even with moderate participation in pure equity

20 Statutory Details and Risk Factors 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. This document does not constitute advice to buy/sell any scheme of Axis Mutual Fund. 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. Please consult your tax adviser with respect to the specific tax implications Data as on 31 st May 2016 Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.