Axis ESG Integration Strategy Fund Direct Growth INF846K01W23

Axis ESG Integration Strategy Fund earns an Average Process Pillar rating.

The leading factor in the rating is the parent firm's five-year risk-adjusted success ratio of 54%. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. The size of the portfolio management team also strengthens the process. With three portfolio managers, the fund is reasonably well-resourced. However, the process is limited by the parent firm's five-year retention rate of 66%, which raises concerns about long-term strategic consistency..

This strategy tends to hold larger, more growth-oriented companies compared with its average peer in the Equity - ESG Morningstar Category. Looking at additional factor exposure, this strategy has consistently favored high-quality stocks, including those with low financial leverage and solid returns on equity, compared with Morningstar Category peers during recent years. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it endure downturns better than Morningstar Category peers. Different from its historical appetite, however, the strategy was less exposed to the Quality factor compared with Morningstar Category peers in the most recent month. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. This orientation tends to pay off most prominently when markets are hot. In the most recent month, however, the fund's Volatility exposure was in line with the Morningstar Category average. In addition, this strategy's holdings have included more companies with high dividend or buyback yields than peers over these years. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in communication services and technology relative to the category average by 3.3 and 2.5 percentage points, respectively. The sectors with low exposure compared with category peers are basic materials and energy, underweight the average by 4.5 and 2.7 percentage points of assets, respectively. The portfolio is composed of 47 holdings and is quite concentrated. In particular, 45.1% of the fund’s assets are housed within the top 10 holdings, versus the typical peer's 39.6%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 54% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.