Today’s Mid Caps are the Large Caps of tomorrow

Traditional Life Cycle of a company

Small Caps

Start-up Phase

Mid Caps

Growth Phase

Large Caps

Mature Phase

Superior growth profile

Established track record

Maintains flexibility

Lower risk compared to smaller companies

Emerging companies

High growth phase

But prone to higher risks

Business not yet well established

Stable growth

Established business models

Reduced flexibility

Lower risk compared to Mid Cap companies

A decade ago, today’s Large Caps were Mid Caps

Nifty Constituents: 2000 & 2010

December 2000

Hindustan Unilever Larsen & Toubro GlaxoSmithkline Consumer

Healthcare

Infosys Technologies Tata Steel Dabur India

Reliance Industries HPCL Asian Paints

Reliance Petroleum BHEL Mahindra & Mahindra

ITC Hero Honda Motors Indian Petrochemicals

Zee Entertainment Dr Reddys Laboratories Hewlett-Packard Globalsoft

MTNL Castrol India Procter & Gamble Hygiene

and Health Care

State Bank of India Novartis India Tata Global Beverages

Satyam Computer Reliance Infrastructure Tata Power Company

Ranbaxy Laboratories Glaxosmithkline Pharma ABB

ICICI Ltd ACC Indian Hotels

HDFC Grasim Industries Tata Chemicals

Cipla Ambuja Cements Reckitt Benckiser (I)

NIIT Bajaj Holdings & Investment Kochi Refineries

Hindalco Industries Colgate-Palmolive (India) HCL Infosystems

HDFC Bank Tata Motors Oriental Bank of Commerce

Nestle India Britannia Industries

December 2010

Reliance Industries Hindalco Industries Power Grid Corp of India

Infosys Technologies Sterlite Industries Sesa Goa

ICICI Bank Jindal Steel & Power Siemens India

Larsen & Toubro NTPC Jaiprakash Associates

HDFC Wipro Reliance Infrastructure

ITC GAIL Ambuja Cements

HDFC Bank Tata Power ACC

State Bank of India Dr Reddy's Laboratories HCL Technologies

Tata Consultancy Bajaj Auto SAIL

Services

Bharti Airtel IDFC DLF

Tata Motors Hero Honda Motors Reliance Communications

ONGC Maruti Suzuki India Ranbaxy Laboratories

Tata Steel Cipla Reliance Power

BHEL Sun Pharmaceutical BPCL

Axis Bank Punjab National Bank Reliance Capital

Mahindra & Mahindra Kotak Mahindra Bank Suzlon Energy

Hindustan Unilever Cairn India

signifies erstwhile Mid Cap companies. Mid Caps defined as those with market capitalisation within the range of the constituents of BSE Mid Cap index. The companies have been sorted on the basis of % weight in the Nifty. Source of data: Bloomberg. This data does not constitute a stock specific recommendation by Axis AMC.

Winners in Mid Caps create long term wealth

A journey of thousand miles starts with small steps…….

Some of the Large Caps today were Mid Caps not so long ago.

Past performance may or may not be sustained in the future. The companies mentioned above are only for explaining the strategy of Axis Midcap Fund and should not be construed as recommendations from Axis Asset Management Co. Ltd.Source of data: Bloomberg. Returns are compounded annualised.

Kotak Mahindra Bank Dec-00 344 33,353 58.0%

Bharti Airtel Feb-02 7,580 136,255 38.7%

Sun Pharmaceuticals Industries Jan-01 2,841 49,944 33.5%

Asian Paints Dec-00 1,776 27,598 32.0%

Start Date Market

Capitalisation Capitalisation

` Crs. (Dec-10)

` Crs.

Market Return (CAGR)

Valuations well off peak

Source of data: Bloomberg. Data as on 31st December 2010. P/E = Price-to -earnings ratio = Market Price per Share/ Earning per Share.

31-Dec-07 27 9789

31-Dec-10 18 7803 33%

Date P/E BSE Mid Cap Index Valuation Discount to 2007

31-Dec-07 24 20287

31-Dec-10 19 20509 21%

Date P/E BSE Sensex Valuation Discount to 2007

What is the Mid Cap opportunity?

?The Mid Cap universe consists of mid-life cycle, high growth, financially established companies

- Combination of higher growth & flexibility of smaller companies, with

- Established track record, financial performance & better liquidity

Source of data: Bloomberg, BSE. Classification based on market capitalization range of BSE Mid Cap Index. As on 31 December 2010.

Large Caps Approx 110 76%

Small Caps >7000 7%

Capitalization Number of Companies Share of Market Cap.

Mid Caps Approx 410 16%

Risk Management

?Mid Caps tend to be higher on the risk-reward scale than Large Cap companies

?There is a need to manage the higher risks from Mid Cap investing

?Solution: Larger Mid Caps

- “Best of both worlds” mix of characteristics of Large and Mid Cap companies

- Flexibility and ability to respond to market opportunities leads to higher growth ability compared

to Large Caps

- While their established track records, experienced management teams, market share, name

recognition reduces risk relative to smaller companies

Larger Mid Caps - Higher returns with lower risk

Past performance may or may not be sustained in the future. This is historical data for the period 31 Dec 2005 to 31 Dec 2010. Returns are compounded annualised. Risk in the above chart stands for standard deviation. Performance and risk relate to equal-weighted performance of BSE Mid Cap constituents. Larger Mid Caps are those companies with a market cap greater than or equal to the median stock of the BSE Mid Cap Index. Smaller Mid caps are those companies with a market cap below the median of the BSE Mid Cap Index. Market Cap based classification has been done on annual basis. Source of data: Bloomberg.

Larger Mid Caps

Smaller Mid Caps

Axis Midcap Fund – Best of both worlds

Flexible

Innovative

Better Growth Potential

Mid & Small Size Companies Large Companies

Proven Management

Established Track Records

Liquidity

Less Risky

Larger Mid Caps

Axis Midcap Fund – Key Features

*Refers to Systematic Investment Plan.

Investment Objective To achieve long term capital appreciation by investing predominantly inequity & equity related instruments of mid size companies. The focus of thefund would be to invest in relatively larger companies within this category.

Benchmark BSE Mid Cap Index

Asset Allocation Mid Cap Equities 80 - 100%Other Equities & Fixed Income 0 20%

Allocation within Mid Caps Larger Mid Caps 75 100%Smaller Mid Caps 0 25%(based on mid-point of benchmark stocks’ capitalization)

Recommended Investment Horizon 5 Years or more

Fund Manager Pankaj Murarka - Fund Manager, Equity

Load Structure Entry Load: Nil

Exit Load: 1% if redeemed / switched out within 1 year from the date ofallotment

New Fund Offer (NFO) Period 31st January 2011 to 14th February 2011

NFO Price ` 10 per unit during NFO & at NAV based prices thereafter

Minimum Application Amount ` 5,000 and in multiples of ` 1 thereafter

(for lump sum applications)

Switch-In/ Sleep in Peace Option (SIP)* Available during NFO period & on an ongoing basis

STP Available post NFO period

EasyCall Available during NFO period & on an ongoing basis

-

- -

General Disclaimers and Risk Factors

Important Note: While mid caps have greater potential for growth when compared to large caps, they are riskier investments. Mid caps

over the long term tend to outperform large caps. However, this may not be true for all time periods.

Statutory Details: Axis Mutual Fund, sponsored by Axis Bank Ltd. has been established as a Trust under the Indian Trusts Act, 1882 (liability

restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC) Risk

Factors: All Mutual funds and securities investments are subject to market risks and there is no guarantee that the investment

objective of the schemes will be achieved. The NAV of the units issued by the Mutual Fund under the schemes can go up or down

depending on various factors and forces affecting securities markets. Past performance of the Sponsor, its affiliates/the AMC/the

mutual fund or its schemes does not indicate the future performance of the scheme. The sponsor is not liable or responsible for any loss or

shortfall resulting from the operation of the scheme. Investments in the scheme are subject to various investment risks such as trading

volumes, settlement risk, liquidity risk, default risk, risk of possible loss of principal, etc. Equity and equity related instruments are volatile

by nature. Mid & small size companies may be more volatile & less liquid than larger companies. Mutual Fund Investments are subject to

market risks. Please read the Scheme Information Documents and Statement of Additional Information (SID & SAI) carefully before

investing. Axis Midcap Fund (an open-ended equity scheme) is only the name of the scheme and does not indicate the quality of the

scheme, its future prospects or returns. Investment objective: To achieve long term capital appreciation by investing predominantly in

equity & equity related instruments of mid size companies. The focus of the fund would be to invest in relatively larger companies within

this category. Asset Allocation: Equity and Equity Related Instruments of Midcap companies – 80 - 100%, (of which Larger Midcap

Companies – 75% – 100%, Smaller mid-cap Companies – 0 – 25%), Equity and Equity Related Instruments of Non Midcap Companies – 0 –

20%, Debt and Money Market Instruments – 0 - 20%, including securitized debt up to 20%, derivatives up to 100% and foreign securities

up to 40% of the net assets. Load: Entry load – nil. Exit load – 1% if redeemed/switched out within one year from date of allotment. Terms

of issue and sale and redemption of units: Issue of Units of Rs. 10 each during the NFO period and at NAV based prices during the ongoing

offer. The scheme offers sale and redemption facility on all business days during the ongoing offer. The NAV of the scheme would be

calculated on all business days. The SID & SAI/Key Information Memorandum cum Application form are available at AMC and Registrar

offices, Investor Service Centres, the AMC website (www.axismf.com) and with empanelled distributors.