MC EXCLUSIVE We've strengthened the team and have a more diversified portfolio, says Axis AMC's B Gopkumar

Axis Asset Management Company managing director and chief executive officer B Gopkumar .

Axis Asset Management Company is focused on growth, with all the “repair work” done and dusted, managing director and chief executive officer B Gopkumar has told Moneycontrol, two years after taking on perhaps the most challenging assignment of his career.

Gop, as he is referred to by peers and friends, had his task cut out when he was named for the job in April 2023. Axis AMC was battling accusations of failing to monitor the activities of dealers, allegedly leading to front-running of trades. The company settled with SEBI in March this year. It was done to enable quick and effective closure of regulatory issues, says the former Axis Securities chief.

In an interview to Moneycontrol, he also talks about the steps taken by Axis AMC to make its working more effective and transparent while drawing up the growth path. Edited excerpts of the interview:

You moved from Axis Securities to Axis Asset Management Company when the business was going through a crisis. How much of these issues are history now?

I joined Axis AMC in April 2023 and my aim has been to deliver performance with disciplined risk management, while ensuring responsible investing and building trust with our stakeholders. Accordingly, we have taken necessary measures to further strengthen our multiple lines of defence — business operations and control functions.

We preferred settlement application for alleged violation of certain provisions of SEBI (MF) Regulations, 1996, by neither admitting nor denying the findings of fact and conclusions of law, as stated in the SEBI Settlement order dated March 24, 2025. A settlement was preferred as it enables quick and effective closure of regulatory issues. We have implemented a fully automated system covering all operations, including mobile handovers, and have provided fund managers with substantial flexibility. In my view, recent events represent isolated incidents rather than systemic issues.

To further fortify our team, we appointed separate heads for risk, compliance and legal. We also have a new chief operating officer. All these professionals come with around 20 years of experience. We now have nine fund managers on the equity side and 16 analysts. Fixed income continues to do well. We have eight fund managers on the fixed income side and five analysts.

In terms of our portfolios, we have changed a lot. Previously, our approach involved managing concentrated portfolios but we are now much more diversified. For instance, in our ELSS scheme, the top 10 equity stocks once comprised around 65 percent of total net assets, whereas today, their share is around 40 percent (as on July 2025).

While our investment style remains consistent, we have broadened our diversification. We continue to manage a large ELSS fund, with assets under management now at Rs 35,000 crore. Our small-cap portfolio stands at around Rs 26,000 crore, making it the fifth largest in its segment. Additionally, 99 percent of our equity funds meet or exceed their respective benchmarks on 1-year return basis.

From a product perspective, what are you working on?

Our goal is to bridge the gap between traditional fund management and the transparency offered by modern fintech platforms, empowering customers with comprehensive, easy-to-understand portfolio analysis and smarter, risk-aware investment decisions.

Currently, the industry places heavy emphasis on net asset value (NAV) as the primary metric for investors. However, from a customer’s portfolio perspective, the underlying risk often remains similar — whether the investment is managed directly or through a fund manager. Even when you delegate investment decisions to professionals, your portfolio is still fundamentally a collection of stocks and other assets. We want to make this experience seamless and informative. For instance, if you’re invested in our flexi cap fund, instead of searching for fact sheets each month, our upgraded app will display your portfolio and returns directly and intuitively, making the experience far more user-friendly and engaging.

Another key issue today is that most investors focus predominantly on returns, neglecting the importance of risk-adjusted returns. Metrics like the Sharpe ratio, beta, the quality and valuation of individual stocks, and overall portfolio risk are rarely communicated clearly to customers. Our aim is to change this by incorporating these advanced analytics and risk metrics into the app, so that investors make informed decisions based on risk profile and portfolio quality.

Do you see FinTechs disrupting the AMC industry like it did to lending?

The current approach is heavily focused on performance. This has led to a commoditised landscape, especially in product distribution, overshadowing the distinct value propositions that firms could offer. Mutual funds are inherently transparent products but from the customer’s reporting standpoint, that transparency doesn’t always translate into practical visibility.  For the industry to truly grow and attract more investors, it’s essential to go beyond just highlighting performance. Agility in delivering up-to-date, clear and comprehensive reporting is crucial.

Will fintechs become manufacturers of fund?

The emergence of finrechs has altered the traditional distribution channels but it’s important to recognise that the role of a manufacturer is fundamentally different from that of a distributor. For manufacturers, such as asset management companies, the focus is on achieving scale. Moreover, in traditional distribution, it typically takes around three years of sustained performance for a product to get promoted to investors.

Does the math add up with low value (Rs 100, etc) SIPs?

In the long run, we expect these products to start generating meaningful revenue for us. From a financial inclusion perspective, this approach is similar to low-ticket lending where the customer experience is critical. We believe that the ticket sizes have the potential to grow significantly within seven–eight months. In many ways, this is a catchment product, designed to bring customers into the ecosystem. One of the key metrics I track is the number of new customers acquired.

Right now, many of the new customers are coming through fintech platforms, which are reshaping the industry by increasing the number of unique PAN additions. Most fintechs track the “login-to-purchase” conversion ratio but the bigger challenge may be improving persistency. The only way to truly achieve that is by providing customers with a robust, user-friendly portfolio dashboard. Consistent engagement and transparency are key to building long-term loyalty.

Lately, passives funds have gotten a bit creative with structures etc. What are your thoughts?

The key question is whether passive funds will serve as a satellite allocation or become a core allocation for customers. As passive funds grow more niche and specialised, their broader adoption may become more challenging since many investors find factor models complex and rely heavily on advisers for clarity and guidance. Even today, the passive category is largely driven by ETFs, which remain the preferred vehicle for passive investing.

We conduct many workshops around factor modelling strategies such as momentum investing to improve understanding of the products. Simplicity remains crucial —when products are straightforward, customers understand them better, which helps build scalable growth for the asset management industry.