Axis Mutual Fund announced the launch of the Axis Fixed Term Plan - Series 112 (1143 Days), a close-ended income fund investing in constituents of the CRISIL Medium Term Debt Index. The scheme opened for public subscription on February 23, 2023, and will close on February 28, 2023.
Q. What kind of mutual fund scheme is this?
This is a kind of debt fund instrument that aims to generate returns that are commensurate with the performance of the CRISIL Medium Term Debt Index. However, there is no assurance that the scheme’s investment objective will be realized.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to generate returns through a portfolio of debt and money market instruments that are maturing on or before the maturity of the scheme. However, the scheme does not guarantee/indicate any return. There is no assurance that the scheme’s objective will be achieved. This close-ended debt scheme contains relatively high-interest rate risk and relatively low credit risk.
Q. How may one invest in this fund?
The scheme offers units of Rs. 10 each. Investors can invest under the scheme with a minimum investment of ₹5000 and in multiples of Re 1, thereafter. The scheme offers a Regular Plan and Direct Plan.
Each plan offers the following options:
- Growth option
- Income Distribution cum Capital Withdrawal (IDCW)
|Income Distribution cum Capital Withdrawal (IDCW)||Quarterly IDCW Payout|
|Half-Yearly IDCW Payout|
Scheme(s) having maturity ranging up to 12 months will offer a Quarterly IDCW option (payout facility) in addition to a Growth option.
Scheme(s) having maturity ranging from more than 12 months to 60 months will offer a Quarterly IDCW option (payout facility) & Half yearly IDCW option (payout facility) respectively in addition to the Growth option.
IDCW may or may not be declared under this option at the discretion of the trustee.
Under normal circumstances, the asset allocation under the schemes will be as below:
|Instruments||Indicative Allocation (% of Net Assets)||Risk Profile|
|Debt Instruments||80-100%||Low to Moderate|
|Money Market Instruments||0-20%||Low|
The Scheme shall not invest in foreign securitized debt.
Q. Are there similar mutual funds in the market?
Many asset management companies have launched such funds in the past. Some of them include:
|Name of the fund||Three-year returns (in %)|
|ICICI Prudential FMP - Series 87 - 1214 Days Plan A||6.51|
|SBI Fixed Maturity Plan (FMP) - Series 28||6.34|
|IDFC Fixed Term Plan - Series 179||5.98|
|Nippon India Fixed Horizon Fund XLI - Series 8||5.86|
|HDFC FMP 3360D March 2014 (1) (30)||5.54|
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against the CRISIL Medium Term Debt Index. The scheme will invest in the constituents of the underlying index.
Q. How do investors seek redemption from the scheme?
No redemption is permitted before maturity. The units of respective schemes(s) will be redeemed only on the maturity date of the respective scheme(s). This means that the units of the scheme cannot be redeemed by the unit holder directly with the fund until its maturity date.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” is also “Zero”.
Q. Who will manage this scheme?
Sachin Jain is the fund manager for the scheme
Q. Does the fund contain any inherent risk?
The scheme involves “Moderate Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be at moderate risk. However, investors should consult their financial advisors, if in doubt about whether the product is suitable for them.