Investors looking to diversify their Indian portfoliow ith exposure to global stocks may consider investing in Axis S&P 500 ETF Fund of Fund. The New Fund Offer (NFO) of Axis S&P 500 ETF Fund of Fund is currently open and closes on April 5, 2023. The scheme is an open ended fund of fund investing in Exchange Traded Funds replicating S&P 500 index. Vinayak Jayanath would be managing the fund and the minimum investment amount is Rs. 500.
There are two important things to know about Axis S&P 500 ETF Fund of Fund. One, it is an Exchange Traded Fund (ETF), the units can be purchased and sold during trading hours of stock exchnage and secondly, it is a Fund of Fund (FoF).
A Fund of Fund makes investments in its own or other fund houses, as opposed to a typical mutual fund, which invests in specific asset classes. When it comes to foreign Fund of Funds, the fund management makes investments in units of foreign mutual fund schemes.
The indicative list of overseas Exchange Traded Funds in which the Axis S&P 500 ETF Fund of Fund proposes to invest includes – iShares Core S&P 500 UCITS ETF, HSBC S&P 500 UCITS ETF, SPDR® S&P 500 UCITS ETF.
But, where will you money be invested? As an investor, your money gets invested in shares of S&P 500 listed companies. The S&P 500 index tracks the performance of 500 large companies listed on the US stock exchange. By investing in Axis S&P 500 ETF Fund of Fund, investors can gain global exposure and bring in the diversification to domestic portfolio.
The S&P 500 index consists of multinational corporations with sound business models and proven track records. The S&P 500 is made up entirely of large-cap US stocks, which adequately reflect all facets of the US economy. Not only in the technology sector but also in other important industries, the US economy is a hub for innovation.
Information technology, health care, and Financials are the top three industries in the S&P 500. By index weighting, the three largest stocks in the S&P 500 index are Microsoft, Apple, and Amazon. Other major stocks include Facebook, Berkshire Hathaway, and Visa.
Chandresh Nigam, MD & CEO, Axis AMC says, “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.”