Profiting from technological disruption

Technology-led disruption is affecting many sectors and dealing with it has become a major challenge for investors. Axis Special Situations Fund is a thematic scheme that seeks to tap the power of disruptive growth. We speak with its fund manager, Ashish Naik, to understand how he manages this fund, which sectors are more vulnerable to disruption and which are more resilient, and which themes investors can bet on, among other things.

- ASHISH NAIK

Can you tell us about your Special Situations Fund?

Disruptive change is accelerating as technological power grows exponentially, while costs fall. This has driven innovation and adoption rates, enabling companies to appear from nowhere to become giants seemingly overnight. If we take a look at the S&P 500, which is an index of the 500 largest US companies for example, the average tenure of a company in the index back in 1964 was 33 years. Fast forward to 2016, the figure was 24 years and by 2027, it's predicted to be just 12 years.

This combination of innovation and speed has led to a rich and fast-growing universe of transformational companies that represent compelling investment opportunities. Over the last decade, a similar trend has been witnessed in India as well. To capture this trend of long-term tell sustainable growth led by innovation in India and globally, Axis Special Situations Fund (an open-end equity scheme following the special-situations theme) has disruption as the core theme. To summarise, Axis Special Situations Fund is an open-end thematic fund which will look to target the power of disruptive growth. With Schroders' 90+ analysts and investment specialists internationally, we believe your investment can benefit from a globally collaborative investment approach that brings together the best of India with those in the global ecosphere.

“We categorise companies that fall under the disruption theme into four buckets: Disruptors, Enablers, Adapters and Deniers.”

How do you pick stocks for your fund?

We categorise companies that fall under the disruption theme into four buckets: Disruptors, Enablers, Adapters and Deniers.