Axis Mutual Fund recently launched a new fund offer (NFO) for Equity ETFs fund of funds. It’s an open-ended scheme. The objective of the scheme is to provide long-term capital appreciation from a portfolio investing predominantly in units of domestic equity ETFs. There is no assurance that the investment objective of the scheme will be realised.
The NFO closes on February 18. The minimum subscription amount is ₹5,000 and in multiples of Re 1 thereafter.
The fund house says that it is suitable for investors who seek capital appreciation over long term and who want investments predominantly in units of domestic equity ETFs. In other words, it is meant for investors who want passive portfolio to navigate markets with expertise.
The benchmark for the fund is Nifty 500 TRI. The Scheme will invest in units of equity-oriented ETFs (of Axis AMC or any other mutual funds) in conformity with the investment objective of the Scheme and in terms of the prevailing SEBI (MF) Regulations.
Investment strategy
Being a fund of funds scheme, the scheme will invest in units of ETFs (managed by Axis Mutual Fund or any other Mutual Funds) within the asset allocation pattern.
The fund manager will decide on the weightage to be assigned to one or more ETFs. The outlook will be based on a top-down approach of the sector or the market to identify opportunities. The fund manager will also assess the macro-economic environment to identify themes and sectors that are expected to outperform over a medium to long term investment horizon.
This is how the scheme will allocate its assets:
| Allocation | Minimum (%) | Maximum (%) | Risk profile |
| Units of domestic equity-oriented ETFs | 95 | 100 | Medium to high |
| Debt & money market instruments | 0 | 5 | Low to medium |
(Source: amfiindia.com)
Debt instruments and money market instruments include certificate of deposit, commercial paper, treasury bills (T-Bills), commercial usance bills, repos, securities issued by the central and state governments, non-convertible debentures and short-term deposits.
Investors can also enrol for the SIP facility wherein there could be six monthly instalments of ₹1,000 each and three instalments of ₹12,000.