Axis Mutual Fund announced the launch of the Axis S&P 500 ETF Fund of Fund, an open-ended fund of fund tracking the S&P 500 TRI constituents.
The scheme opened for public subscription on March 22, 2023, and will close on April 05, 2023, and will re-open for ongoing subscription and redemption within five business days from the date of allotment of units.
Q. What kind of mutual fund scheme is this?
This is a kind of an open-ended fund of fund investing in Exchange Traded Funds (ETFs) replicating S&P 500 TRI, subject to tracking errors.
Q. What is the main objective of investing in this fund?
The scheme's investment objective is to replicate the performance of the S&P 500 TRI by investing in Exchange Traded Funds replicating S&P 500 TRI, subject to tracking errors. However, there can be no assurance that the investment objective of the scheme will be achieved
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹500 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments | Indicative Allocations (% of total assets) | Risk Profile | |
| Minimum | Maximum | High/Moderate/Low | |
| Units/shares of Exchange Traded Funds replicating S&P 500 TRI | 95 | 100 | Very High |
| Debt, Money market instruments and/or units of liquid schemes | 0 | 5 | Low to Moderate |
Under normal circumstances, at least 95% of the Net Assets of the scheme will be invested in overseas Exchange Traded Funds (ETFs) replicating S&P 500 TRI, subject to the availability of the eligible investment amount.
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the S&P 500 TRI (INR). The scheme aims to provide returns before expenses that correspond to the total returns of the S&P 500 TRI (INR), subject to tracking errors. Hence the benchmark.
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 equal to:
- If redeemed/switched out within 30 days from the date of allotment - 0.25%
- If redeemed/switched out after 30 days of allotment – Nil.
The units issued on reinvestment of Income Distribution cum Capital Withdrawal (IDCW) shall not be subject to load. No load shall be levied on switches between options and sub-options of the scheme.
Q. Who will manage this scheme?
Vinayak Jayanath would be the designated fund manager of the scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High 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 subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
