The New Fund Offer (NFO) of the fund is open for subscription and will close on July 18. The Axis Services Opportunities Fund is designed to offer investors access to a carefully curated portfolio of companies that are at the forefront of India’s services-led economic transformation, according to a press release by the fund house.
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The fund aims to generate long-term capital appreciation by investing in scalable, capital-efficient, and competitively advantaged businesses that derive their core revenues from service-based offerings. The fund will be managed by Shreyash Devalkar (Head – Equity), Sachin Relekar (Senior Fund Manager), and Krishnaa Narayan (for overseas investments).
The fund will be benchmarked against NIFTY Services Sector TRI. The minimum application amount is Rs 100 and in multiples of Re 1 thereafter.
“India’s future growth is expected to be increasingly service-led, and the structural tailwinds for this segment are both deep and durable,” said B. Gopkumar, MD & CEO, Axis AMC.
“With the Axis Services Opportunities Fund, we are offering investors an actively managed vehicle that is built to tap into this long-term transformation. From legacy sectors like banking to emerging models in e-commerce, fintech and healthcare, the fund aims to curate the best of India’s services story. It aligns with our long-term investment philosophy — identifying quality, capital-efficient businesses that can thrive through cycles and deliver superior risk-adjusted returns,” he added.
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The Axis Services Opportunities Fund is positioned to capture this structural shift. The fund will invest at least 80% of its assets in equities of companies that are part of the services theme, across 48 industries as defined by the benchmark NIFTY Services Sector Index. These include financial services, IT, telecom, power, e-commerce, transport, healthcare services, fintech, entertainment, and more.
The fund will maintain a high active share and adopt a bottom-up stock selection approach. The investment strategy will focus on identifying quality businesses with consistent earnings, strong return on capital employed (ROCE), and the ability to scale sustainably over the long term.
“As the services sector becomes the cornerstone of India’s economic growth, our approach with the Axis Services Opportunities Fund is to rigorously identify companies that demonstrate not just scale but sustainable competitive advantages and efficient capital allocation. We believe that a disciplined, bottom-up stock selection process focusing on quality earnings and strong return ratios will enable us to capture the nuanced opportunities within this diverse and evolving sector. This fund aims to deliver consistent, risk-adjusted returns by investing across a broad spectrum of service industries, reflecting our conviction in the long-term structural shift towards a services-driven economy,” said Ashish Gupta, CIO, Axis AMC.
Why invest now?
The launch comes at an opportune time. Current dynamics make the quality of businesses in this space more compelling, supported by stronger ROE and ROCE, there is also a visible shift in profit dynamics in the NSE 500 PAT pool to 53% in FY24, according to the release by the fund house.
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Despite this, valuations remain reasonable in many selected segments, offering investors a growth at a reasonable price. There’s also increasing divergence in sectoral performance — for instance, financials and IT often show contra-trends — which, when actively managed, can enhance return potential and reduce portfolio risk. The fund’s diversified approach within services is intended to harness these dynamics.
The fund complements Axis AMC’s suite of thematic offerings, including the Axis Consumption Fund and Axis India Manufacturing Fund, each of which maps to a distinct pillar of the Indian economy. Together, they provide investors the opportunity to align their portfolios with the country’s long-term structural growth trends.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
