Axis Triple Advantage Fund: A good asset allocation fund in current market conditions

Jun 21, 2022 / Dwaipayan Bose | 18 Downloaded |  2619 Viewed | | | 2.5 |  5 votes | Rate this Article
Mutual Funds article in Advisorkhoj - Axis Triple Advantage Fund: A good asset allocation fund in current market conditions
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Market context

The equity market has been very volatile over the past few months. The Nifty is down 17% from its 52 week high and the Nifty 50 TRI is down 11% on a year to date (YTD basis) Data source: Advisorkhoj.com as on 20 June, 2022. High inflation is the main concern of equity markets around the world. Central banks like Fed and RBI have been raising interest rates to bring down inflation. Higher interest rates are making risk-free investments like US Treasury bonds more attractive investments.

As a result, we are seeing large outflows of funds from equity markets. The outlook on near term inflation is uncertain since headline inflation in the US and also in India, continues to be very high despite rate hikes. The Russia Ukraine war and economic sanctions of Russian exports (comprising primarily of oil and gas) has further complicated the situation making the job of central banks more difficult. As such, we expect the markets to remain volatile in the near term, with further downside risks.

Asset allocation

Asset allocation is spreading your investments over different asset classes e.g. equity, fixed income, gold. Asset allocation is important in volatile markets, since it reduces volatility in your portfolio. Different asset classes have different risk / return characteristics and give different returns in different market conditions.

The chart below shows calendar year returns of different asset classes over the last 10 years; Nifty 50 TRI is used as the proxy for equity andNifty 10 year G-Sec Benchmark Index for fixed income.


Mutual Funds - Calendar year returns of different asset classes over the last 10 years

Source: National Stock Exchange, Advisorkhoj Research, 1st Jan 2011 to 17th Jun 2022. Equity: Nifty 50 TRI; Debt: Nifty 10 year benchmark G-Sec Index; Gold: Gold Price in INR. Disclaimer: Past performance may or may not be sustained in the future.


You can see that winners rotate across asset classes. In the last 12 calendar years (including the current year), equity was the winner in 5 years (2012, 2013, 2014, 2017 and 2021), debt was winner in 2 years (2015 and 2016) and gold was the winner in 5 years (2011, 2018, 2019, 2020 and 2022 YTD). Therefore, it is important to invest in multiple asset classes to reduce portfolio volatility and optimize returns in different market conditions.

Suggested reading: How different hybrid funds help in asset allocation?

What are multi asset allocation funds?

Multi asset funds are hybrid mutual fund schemes which invest in at least three asset classes primarily equity, fixed income and gold. Apart from these three asset classes, multi asset allocation funds can also invest in REITs (real estate) and InvITs (infra). In this blog post, we will review Axis Triple Advantage Fund, one of the best performing multi asset allocation funds in the last 5 years.

Axis Triple Advantage Fund

Axis Triple Advantage Fund is a multi-asset allocation hybrid fund. The scheme was launched in August 2010 and has Rs 1,666 Crores of Assets under Management (AUM). The expense ratio of the scheme is 2.09%. Ashish Naik and R. Sivakumar are fund managers of the scheme. The asset allocation of the scheme is as follows:-

  • 65 – 80% of its assets in equity and equity related securities

  • 10 – 30% in fixed income

  • 10 – 30% in gold

  • The scheme can also invest up to 10% of its assets in REITs and InvITs.

Growth of Rs 10,000 investment in Axis Triple Advantage Fund since NFO

The chart below shows the growth of Rs 10,000 investment in the scheme since NFO. Over the last 11 years or so, your investment would have multiplied by nearly 2.6 times at a CAGR of 8.6% (versus Nifty 50 TRI CAGR of 10.3%).


Mutual Funds - Growth of Rs 10,000 investment in Axis Triple Advantage Fund since NFO

Source: Advisorkhoj Research (as on 17.06.2022)


Let us now see, how Axis Triple Advantage Fund performed versus gold since inception. The chart below shows the growth of Rs 10,000 investment in the scheme versus gold since NFO. You can see that the scheme outperformed gold over long investment tenures. The performance of Axis Triple Advantage Fund versus Nifty and gold demonstrates the benefits of multi asset allocation. Axis Triple Advantage Fund provided stability across different market conditions and investment cycles.


Mutual Funds - Growth of Rs 10,000 investment in Axis Triple Advantage Fund versus gold since NFO

Source: Advisorkhoj Research (as on 17.06.2022)


Smaller Drawdowns

The chart below shows the biggest drawdowns in the market over the last 10 years and the performance of Axis Triple Advantage Fund versus the market benchmark Nifty 50 TRI during these deep corrections. You can see that in most cases, the scheme experienced much smaller drawdowns compared to Nifty.


Mutual Funds - Biggest drawdowns in the market over the last 10 years and the performance of Axis Triple Advantage Fund versus the market benchmark Nifty 50 TRI

Source: Advisorkhoj Research (as on 20.06.2022)


Suitable for long term investments

The chart below shows the SIP returns of Axis Triple Advantage Fund since inception. Over the last 12 years or so, you could have accumulated a corpus of Rs 24 lakhs (as on 17th June 2022) at a XIRR of 8.7% through a monthly SIP of Rs 10,000 in Axis Triple Advantage Fund since inception.


Mutual Funds - SIP returns of Axis Triple Advantage Fund since inception

Source: Advisorkhoj Research (as on 20.06.2022)


Why invest in Axis Triple Advantage Fund?

  • Creates long-term wealth through exposure to equities.

  • Protects against market volatility through debt investments.

  • Facilitates investing in Gold, one of the most popular option amongst Indian investors and a good hedge against macro events.

  • The fund rebalances your portfolio periodically by selling the asset which has outperformed, and buying the asset which has underperformed. This boosts the chances of increasing the average returns of investment.

Who should invest in Axis Triple Advantage Fund?

  • Investors who primarily want capital appreciation over sufficiently long investment tenure.

  • Investors with high risk appetites.

  • Investors with at least 3 – 5 year investment horizons.

Investors should consult with their financial advisors if Axis Triple Advantage Fund is suitable for their investment needs.

Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

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