Since different sectors and market segments perform differently at different times, this scheme’s investment approach is specifically designed to allocate dynamically across the market cap and sectoral/thematic passive strategies.
Axis Mutual Fund, launched Axis Equity ETFs FoF, an open-ended fund of fund scheme predominantly investing in units of domestic equity ETFs. The minimum application amount is set at Rs 5,000 and investors can invest in multiples of Re 1, thereafter. The new fund will track the Nifty 500 TRI benchmark and invest in domestic equity ETFs basis the fund manager’s top-down investment view. The new fund will be managed by Fund Manager Shreyash Devalkar
The NFO will be open for subscription on February 4, 2022, and close on February 18, 2022.
The company claims, since different sectors and market segments perform differently at different times, Axis Equity ETFs FoF’s investment approach is specifically designed to allocate dynamically across the market cap and sectoral/thematic passive strategies. This will allow investors the benefit of risk diversification by allocating across multiple equity ETFs. ETFs are one of the most popular vehicles of investing in passive strategies as they replicate the portfolio of the underlying index while trading in bite-sized units on an exchange at market-determined prices. In 3 years, equity ETFs’ AUM has increased to more than 3x. Yet, investors often find it difficult to choose the right ETF; which will help gain potential alpha while maintaining the necessary diversification.
Furthermore, the company says the scheme will endeavour to invest and maintain domestic ETF exposure greater than 95 per cent of net assets at all times. The resulting tax treatment will be that of equity mutual funds. In addition to exposure to all equity ETFs in the market, the new scheme will remove the risk of security selection while aiming for minimal tracking error. Given the mutual fund structure, the company says, investors will be able to look to invest through various systematic options like SIPs, STPs and lumpsum investments.
Chandresh Nigam, MD and CEO, Axis AMC says, “Passive investing’s efficient low-cost strategies that track a specific index as closely as possible while relying on the broader market wisdom, have been some of the major reasons for its increased importance amongst the investors. With the launch of the Axis Equity ETFs FoF, we are seamlessly integrating market cap management and sectoral/thematic management, thereby enabling active management of passive strategies.”
Key highlights;
• Category: An Open-Ended Fund of Fund scheme predominantly investing in units of domestic equity ETFs
• Benchmark: Nifty 500 TRI
• Fund Manager: Shreyash Devalkar, Fund Manager
• NFO open date: 4th February 2022
• NFO close date: 18th February 2022
• Minimum Application Amount: Rs 5,000
• Exit Load: 1 per cent for 15 days, Nil thereafter
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