Axis Mutual Fund Brings Axis S&P 500 ETF Fund of Fund, NFO Opens Today

Axis Mutual Fund on Wednesday announced the launch of their New Fund Offer – Axis S&P 500 ETF Fund of Fund. It is an open ended fund of fund investing in Exchange Traded Funds replicating S&P 500 TRI, subject to tracking errors.

The new fund will adhere to the S&P 500 TRI (INR) benchmark, the fund house said.

Vinayak Jayanath would be managing the fund and the minimum investment amount is Rs. 500 and in multiples of Re. 1 thereafter.

The NFO has opened for subscription from March 22, 2023 to April 05, 2023.

A new fund offer (NFO) is the initial offer of a new mutual fund scheme to the public. It is the first time that a mutual fund company offers a new scheme to investors for subscription. During an NFO, investors can subscribe to the units of the mutual fund.

Axis S&P 500 ETF Fund of Fund

The Axis S&P 500 ETF Fund of Fund endeavours to invest at least 95% of the net assets in units/shares of overseas Exchange Traded Funds replicating S&P 500 TRI, subject to the availability of eligible investment amount and the remaining in Debt and Money Market investments. The indicative list of overseas Exchange Traded Funds in which the Scheme proposes to invest is as follows;

-iShares Core S&P 500 UCITS ETF

-HSBC S&P 500 UCITS ETF

-SPDR S&P 500 UCITS ETF

Understanding a Fund of Fund

Unlike a regular mutual fund that invests in distinct asset classes, a Fund of Fund invests in schemes of its own or other fund houses. In the case of international Fund of Funds, the fund manager invests in units of offshore mutual fund schemes by ensuring that the target fund’s investment philosophy and risk profile matches with that of the fund’s mandate.

Some Key Attributes of the Fund Highlighted By Axis AMC:

• Global Exposure: Since the S&P 500 index tracks the performance of 500 large companies listed on the US stock exchange, investors can gain global exposure. Furthermore, the index evolves as the US markets evolves with changing sectoral dynamics
• Sector Agnostic Representation: The Index potentially aims to provide broad based exposure across all sectors
• Low Cost Passive Exposure: Avenue to take low cost exposure in US market and also potentially benefit from INR depreciation

Chandresh Nigam, MD and CEO, Axis AMC said, “ETFs are soon becoming popular amongst the various vehicles of investing in passive strategies in India. In India, Fund of Funds can be considered as an interesting entry point for investors with a longer investment horizon and who wish to diversify their portfolio from a global standpoint.”

“With the launch of the Axis S&P 500 ETF Fund of Fund, we are seamlessly enabling global exposure through passive strategies. The new scheme’s approach aligns with our philosophy of ‘Responsible Investing’ and we believe, will be a notable addition to our portfolio of products,” Nigam added.

Investors should consult their financial advisers if in doubt about whether the product is suitable for them.