Axis Mutual Fund announced the launch of the Axis Nifty IT Index Fund, an open-ended index scheme best suited to investors seeking long-term wealth creation. This fund seeks to track returns by investing in a basket of Nifty IT TRI stocks and aims to achieve returns of the stated index, subject to tracking error.
The scheme opened for public subscription on June 27, 2023, and will close on July 11, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This is an open-ended index fund scheme tracking the NIFTY IT TRI.
B Gopkumar, MD & CEO, Axis AMC said, “India has been a leader in driving change through technology across sectors. This has been more visible in the last three years, post Covid when we showed our resilience and resurgence. We are on the cusp of rewriting our growth story led by technological innovations. Increasingly all companies will be operating in this digital arena. With the launch of the Axis Nifty IT Index Fund, we are expanding our bouquet of products, more importantly, offering our investors an opportunity to be part of India’s tech-enabled story.”
Q. What is the main objective of investing in this fund?
The scheme seeks to provide returns before expenses that correspond to the total returns of the NIFTY IT TRI subject to tracking errors. However, there can be no assurance or guarantee 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 ₹5000 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 | ||
Securities covered by Nifty IT TRI | 95% | 100% | Very High |
Debt & Money Market Instruments | 0% | 5% | Low to Moderate |
Q. Are there similar mutual funds in the market?
To date, only ICICI Prudential Mutual Fund has launched a similar IT index fund scheme, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. The name of the fund is ICICI Prudential Nifty IT Index Fund and was launched on July 28, 2022.
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against Nifty IT TRI. As the scheme primarily invests in constituents of Nifty IT TRI and the investment objective is to generate returns in a portfolio of equity shares in the same proportion as the benchmark index, the scheme will be benchmarked against Nifty IT TRI.
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” would be calculated as
- If redeemed or switched out within a week from the date of allotment: 0.25%
- If redeemed/switched out after seven days from the date of allotment: Nil
Q. Who will manage this scheme?
Hitesh Das is the designated fund manager of this 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.
