Axis AMC looks to garner Rs 3,000 crore from business cycles fund

According to the fund house, the economy is looking up now and is at the cusp of a new capex cycle. It cited the stronger balance sheets, robust domestic demand and increased focus on production linked incentive (PLI) schemes leading to more capacity addition along with the widespread digitalisation offering as the reason for the optimism.

The new fund will have a cycle-driven portfolio, Iyengar said, adding that in expansionary times, it will focus on building a cyclical sector-based portfolio of companies which will benefit from an impending favourable upcycle.

During slowdowns or uncertain times, the portfolio will tilt to counter-cyclical themes or companies that will be in a better position to navigate tough times.

Contrary to a bottom-up approach to investing, this fund will employ a hybrid approach by adopting a top-down approach to identify trends and more importantly choose sectors ideally suited to benefit from their business upcycles and then, use a bottom-up approach to identify particular stocks which would thrive above the rest within the identified sector, he added.

Chandresh Nigam, managing director of the fund house, said multiple drivers are beginning to fall in place for investment cycle pick up now.