Axis Mutual Fund launches ‘Axis Global Alpha Equity Fund of Fund’
· An open ended fund of fund scheme investing in Schroder International Selection Fund Global Equity Alpha
· Offers Indian investors an opportunity to participate in a high quality globally diversified equity portfolio that can complement their Indian equity allocation
· Allocation to global equities can improve the risk-return profile of Indian investors because of diversification benefits
· Schroders owns around 25% stake in Axis Asset Management Company
· NFO date: September 04, 2020 to September 18, 2020
Opportunity and diversification logic dictates that as investors we should not be closed to any meaningful, long term investment idea if we are to achieve the most optimal long term portfolio outcomes. And yet, investors in India have missed out on 97% of the global equity opportunities because their portfolios have overwhelmingly been allocated to the Indian equity markets (which represent only about 3% of the global equity markets*).
All investors everywhere exhibit what is known as a “home bias” when it comes to investing. The term refers to the fact that as investors we allocate more to markets in our own country. However, the extent of the home bias is different in different markets and comes down over time as investors and markets mature. We believe that the time is right for Indian investors to start looking at making global allocations and to bring down the impact of home bias on their portfolios.
India has been and will remain a high growth equity market that has rewarded long term investors. However, India is ultimately a small part of the global equity market. Accordingly, there are many large global sectors and themes that are either not present or - if present - not material in the Indian listed universe (such as consumer technology, Internet and e-Commerce). Therefore, allocation to global products provides two key benefits to Indian investors. First, they allow them to capture the broad opportunity that is available outside the Indian markets. Secondly, they allow them to diversify and improve the risk-return profile of their equity allocations. To get the best out of the global allocation, investors should look at allocating with a long term perspective into strategies that can invest in the best ideas globally without limiting themselves to any one country or sector or theme.