Axis Mutual Fund has launched Axis S&P 500 ETF Fund of Fund, which is an open-ended fund of fund investing in Exchange Traded Funds replicating S&P 500 TRI, subject to tracking errors, the AMC said in a statement. The investment objective of the newly launched fund 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.
“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,” said Chandresh Nigam, MD & CEO, Axis AMC.
“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,” he added.
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The fund will be managed by Vinayak Jayanath. The minimum investment amount is Rs 500 and in multiples of Re. 1 thereafter. The exit load is as mentioned below:
- If redeemed/switched-out within 30 Days from the date of allotment – 0.25%
- If redeemed/switched-out within 30 Days of allotment – Nil
Axis S&P 500 ETF Fund of Fund
Following a passive investment strategy, the Axis S&P 500 ETF Fund of Fund will 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
The list of overseas Exchange Traded Funds provided is indicative and the Scheme can invest in any other overseas Exchange Traded Fund which shall have similar investment objective, investment strategy and benchmark.
Given the mutual fund structure, investors can look to invest through various systematic options like SIPs, STP’s & lumpsum investments.
The NFO opens for subscription from March 22, 2023 to April 05, 2023.
What is 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 the 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 match with that of the fund’s mandate.
Fund of Funds may be an interesting entry point for new as well as seasoned investors. In addition to diversification, investors may also benefit from meticulously structured risk mitigation techniques.
(Disclaimer: The above content is for information purposes only based on a press release by Axis AMC. Mutual Fund investments are subject to market risks. Please consult your financial advisors before investing)