Axis Services Opportunities Fund

Amid global trade tensions and uncertainties, India’s largely domestic-driven economy is less affected by tariff disruptions. Services have largely avoided tariff impacts, with only IT facing some project delays. Given India’s competitive edge in IT services, the sector’s overall impact is expected to be limited, supporting continued growth despite global uncertainty

If redeemed / switched-out within 12 months from the date of allotment: • For 10% of investment: Nil, For remaining investment: 1% • If redeemed/switched out after 12 months from the date of allotment: Nil

The fund is suitable for investors who: a) Want to construct a portfolio that aims to capture India’s services growth story; b) Want to invest in a diversified thematic fund c) Are seeking capital appreciation over the long term with a 5-year investment horizon.

The scheme follows the NIFTY Services Sector TRI as benchmark.

The services sector is highly attractive due to its potential profitability, growth, and valuations, driven by formalization and technology across industries like financial services, healthcare, and quick commerce. The Axis Services Opportunities Fund uses a quality-focused, bottom-up approach to invest in fundamentally strong, scalable companies with competitive advantages, offering investors a chance to benefit from India’s growing services economy.

This fund invests 80% of its assets in companies within the services theme, across 48 basic industries, including Capital Markets, Finance, Power, IT, Healthcare, Banks, and more. Up to 20% of the assets may be invested outside these industries at the fund manager's discretion. Note: Data as on 31st March 2025

The services sector drives India’s economy, contributing 55% to GDP and 41% to employment. Key growth factors are formalization, which helps organized players gain market share, and technology, which boosts reach and productivity. Sectors like healthcare, hospitality, e-commerce, fintech, and travel are likely to benefit from these trends.

The fund uses a bottom-up, flexicap approach to select quality companies with scalable opportunities, capital efficiency, and competitive advantages. It actively manages a diversified portfolio with high active share, focusing on trends in formalization and technology within the services theme.

The Nifty Services Sector Index is currently heavily weighted towards financial services and IT, which include diverse industries like banks, NBFCs, insurance, fintech, and IT companies. With 94 financial services and 29 IT stocks, the sectors are broad and varied. Banks and IT often perform differently during market events, allowing our active management to exploit this. The fund aims for high active share and diversification, as demonstrated by our other thematic funds with active shares above 50%.Note: Data as on 31st March 2025

Axis Services Opportunities Fund is an open-ended equity scheme that follows the services theme, benefiting from formalization and technology implementation. The Scheme aims to provide long term capital growth from an actively managed, diversified portfolio of equity & equity related securities of companies with scalable opportunities, competitive advantage and capital efficiency.

Service as a theme focuses on investing in companies that provide experiences, solutions, or expertise. It benefits from economic formalization and technology growth, driven by rising incomes and digitalization. This theme covers traditional sectors like Banking, Insurance, IT, Telecom, and Power, as well as emerging areas such as Logistics, Quick Commerce, E-commerce, and Fintech.

The services sector has long been growing, but now features higher-quality businesses with stronger ROE and ROCE. It contributes 53% of NSE 500’s profits, driven by telecom, quick commerce, hospitals, logistics, and banks. Valuations remain relatively attractive. Opportunities also exist in healthcare and hospitality, where formalization and technology can boost organized players’ market share.