Axis Mutual Fund has come out with a new fund offer (NFO) in its “Debt Scheme” category. The new fund called “Axis Long Duration Fund” is an open-ended fund launched on December 07, 2022.
The NFO would be available for public subscription till December 21, 2022. The scheme would reopen within five days from the date of allotment. The idea behind putting money in this scheme is to generate optimal returns while incurring moderate levels of risk. Investors stand to gain from investing in this fund through capital appreciation of its portfolio.
A release from Axis Mutual Fund states, “Investments shall predominantly be made in debt & money market instruments. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.” This scheme’s investments in securitized debts will not exceed 50 per cent of its net assets. The risk involved is moderate and only investors seeking regular income, in the long run, must park their money in them. The minimum initial investment in this fund is ₹5000 after which investors may make minimum subsequent investments of ₹1000. The fund will track the NIFTY Long Duration Debt Index A – III. Three fund managers, namely Devang Shah, Kaustubh Sule, and Hardik Shah will jointly look into the working of this fund.
Many investors are concerned if these debt instruments offer tax benefits too. Commenting on the same, Viral Bhatt, Founder, Money Mantra said, “Axis Long Duration Fund is a debt mutual fund, which does not inherently contain any tax benefits. However, it’s a tax-efficient debt mutual fund, where if you hold more than three years - you will get indexation benefits on debt mutual fund.”
The current volatility in the market has pushed many veteran investors into adopting a conservative investing mood. Elucidating if this is the right time to invest in debt funds or allocate some of your investments into debt instruments, Suresh Sadagopan, MD & Principal Officer, Ladder7 Wealth Planners said, “The fund seeks to invest in long duration govt papers locking decent tax-adjusted returns over the long term. This is suitable for people with a long investment horizon and is looking to get inflation-adjusted real returns over time.”
It is common to allocate some money to equities and some to debt. However, how much one must money one must keep in debt or equities depends on the investors’ individual risk appetite and financial goals.