Axis Mutual Fund announced the launch of the Axis S&P BSE Sensex ETF, an open-ended exchange-traded fund tracking the S&P BSE Sensex TRI constituents.
The scheme opened for public subscription on March 10, 2023, and will close on March 15, 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 kind of open-ended exchange-traded fund (ETF) scheme aims to generate returns by investing in a basket of S&P BSE Sensex TRI stocks and aims to achieve returns of the stated index, subject to tracking error. The product is apt for investors seeking long-term wealth creation solutions.
Q. What is the main objective of investing in this fund?
The investment objective of the Scheme is to benefit from returns before expenses that correspond to the total returns of the S&P BSE Sensex TRI Index subject to tracking errors. However, there is no assurance that the scheme’s investment objective 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 Allocation (as % of total assets) | Risk Profile | |
| Equity instruments covered by S&P BSE Sensex TRI | 95% | 100% | Very High |
| Debt & Money Market Instruments | 0% | 5% | Low to Moderate |
The scheme may take exposure to equity derivatives of constituents of the underlying index for a short duration when securities of the index are unavailable, insufficient or for rebalancing at the time of change in the index or in case of corporate actions, as permitted subject to rebalancing within seven days (or as specified by SEBI from time to time). The scheme's exposure in derivative instruments shall be up to 20 per cent of the scheme’s net assets.
Q. Are there similar mutual funds in the market?
To date, many asset management companies have launched ETFs, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
| Name of the ETF | Three-year returns (in %) | Five-year returns (in %) |
| HDFC SENSEX ETF | 14.93 | 15.59 |
| ICICI PRUDENTIAL SENSEX ETF | 20.17 | 13.63 |
| LIC SENSEX ETF | 20.10 | 13.67 |
| UTI S&P SENSEX ETF | 20.15 | 13.67 |
| Source: MoneyControl | ||
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the S&P BSE Sensex TRI. As the Scheme primarily invests in constituents of S&P BSE Sensex TRI & the investment objective is to provide returns before expenses that correspond to the total returns of the S&P BSE Sensex TRI, the scheme will be benchmarked against the S&P BSE Sensex TRI.
The S&P BSE Sensex TRI is designed It is designed to measure the performance of the 30 largest, most liquid and financially sound companies across key sectors of the Indian economy that are listed at BSE Ltd. The index is calculated based on float-adjusted market cap weighted methodology.
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”. However, the fund house reserves the right to modify or change the load structure on a prospective basis.
Q. Who will manage this scheme?
Ashish Naik 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.
