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Asset management company, Axis Mutual Fund, has announced the launch of Axis Equity ETFs FoF, an open-ended fund of fund scheme that will predominantly invest in units of domestic equity exchange-traded funds.
The new fund offer (NFO) will be open for subscription on 4 February and close on 18 February. The scheme will track the Nifty 500 Total Return Index (TRI) benchmark and look to generate alpha by investing in domestic equity ETFs basis the fund manager’s top-down investment view.
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 three years, equity ETFs’ assets under management (AUM) have increased to more than three times.
As per the fund house, since different sectors and market segments perform differently at different times, Axis Equity ETFs FoF’s investment approach has been designed to allocate dynamically across market cap and sectoral or thematic passive strategies.
This allows investors the benefit of risk diversification by allocating across multiple equity ETFs. Furthermore, the scheme will look to invest and maintain domestic ETF exposure greater than 95% of net assets at all times.
Chandresh Nigam, managing director and chief executive officer, Axis AMC said, “Passive investing’s efficient low-cost strategies that tracks 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. The new scheme’s approach aligns with our philosophy of ‘Responsible Investing’ and we believe, will be a notable addition to our portfolio of products."
The new fund will be managed by Shreyash Devalkar. The minimum application amount is ₹5,000 and investors can invest in multiples Re 1, thereafter. There will be a 1% exit load till 15 days from the date of allotment, and nil thereafter.
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