Enable active management of passive strategies with Axis Equity ETFs FoF from Axis Mutual Fund (an open-end fund of funds investing primarily in domestic equity ETF shares)

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Mutual funds have gained popularity in recent times as an effective investment channel. According to a recent report by AMFI, mutual fund assets reached INR 37.73 trillion as of December 31, 2021. This is more than double in the space of just five years. In fact, the total number of folios as on On December 31, 2021 amounted to 12.02 crore.

Passive strategies are increasingly attracting interest from investors across all risk profiles. ETFs are one of the most popular vehicles for investing in passive strategies because they replicate the portfolio of the underlying index while trading small units on an exchange at market-determined prices. The fund-of-funds route is used by investors to exploit the potential of the “untapped market” by ensuring that the investment philosophy and risk profile of the target fund matches that of the fund’s investment objective to create long-term capital appreciation.

To help investors benefit from market capitalization management as well as sector/thematic management, Axis Mutual Fund has launched the Axis Equity ETFs FoF, an open-end fund of funds investing primarily in shares of domestic equity ETFs. The new fund will track the Nifty 500 TRI benchmark and strive to generate alpha by investing in domestic equity ETFs based on the fund manager’s top-down investment view.

Decode Axis Equity ETFs FoF and understanding the nuances of building long-term wealth, we spoke to Ashwin Patni, Head Products & Alternatives, Axis AMC. Here are the main takeaways from the conversation.

How does a fund of funds ETF work?

Funds of funds that leverage ETFs (exchange-traded funds) in their portfolio are an increasingly popular investment tool in the country. Investing in ETFs through funds of funds is more accessible than investing directly in this instrument since ETFs require a Demat trading account. However, Fund of Funds ETFs are not limited by this requirement.

“Mutual funds have now become a very common product in India. As core products grow in popularity and people become more comfortable with the segment, a demand for more sophisticated or differentiated products such as ‘funds of funds’ is a natural progression,” said said Ashwin.

Over the past three years, equity ETF assets have more than tripled. And while ETFs carry an element of risk, the diversified nature of the fund-of-funds makes them better positioned to weather market volatility.

What makes FoFs an attractive investment tool?

“Funds of funds are attractive because there are many stocks and mutual fund regimes that can exhaust investors due to their volume and variety. Also, many investors may not even find it easy to understand how the different regimes work,” Ashwin said, speaking about the benefits of funds of funds, especially for new investors.

“FoF schemes are generally in the hands of professionally managed funds that apply a strategy to achieve the investment objective of the scheme. Therefore, these schemes could be considered by those who do not have much knowledge about investing in mutual funds. Investing in a fund of funds helps them allocate money through a single program to multiple programs,” he added.

Ashwin also explained how funds of funds should be viewed by new and seasoned investors alike. “For a new investor, firstly, there is no need to have a Demat trading account. Also, as it is passively managed, new investors can rely on the wisdom of a fund manager,” a- “Even seasoned and active investors see it as a very natural complement in terms of diversification,” he said.

What sets Axis Equity ETFs FoF apart?

Asset allocation is important for building a long-term sustainable portfolio. However, investors who do not understand financial planning should consult a professional rather than investing on an ad hoc basis. Each asset class offers its own advantages and disadvantages and should not be ignored when developing a financial plan.

“The beauty of funds or fund structures is that they can be profitable and tax-efficient for investors,” he said.

The Axis Equity ETFs FoF offers investors the opportunity to reap the benefits of diversification by investing in a variety of fund categories with a holistic approach to investing with the market environment in mind,” he added.

How to invest in Axis Equity ETFs FoF?

The minimum demand amount is INR 5,000 and investors can invest in multiples of INR 1, thereafter. “The New Fund Offering (NFO) will be open from 4and Feb at 18and February 2022. Once the allocation is complete, the fund becomes open for regular subscriptions and redemptions on a daily basis,” Ashwin said.

“Investors can invest in Axis Equity ETFs FoF via lump sum investing or via SIP to give their mutual fund investments a disciplined approach through systematic investing,” he added.


You can visit the Axis Mutual Fund website www.axismf.com or download the mobile app’Axis Mutual Fund‘ (Android/IOS) and start your investment journey now.

Sources: AMFI data, Axis MF Research as of December 31, 2021 (Includes domestic Equity ETFs recognized by AMFI)

Product labeling:

*Investors should consult their financial advisors if in doubt as to whether the product is suitable for them.

(The labeling of the product assigned when offering the new fund is based on an internal evaluation of the characteristics of the scheme or the model portfolio and it may vary after NFO when actual investments are made)

To note: Investors will bear the recurring expenses of the scheme in addition to the expenses of other schemes in which the fund of funds scheme invests

About Axis AMC: Axis AMC is one of the fastest growing asset managers in India, offering a comprehensive bouquet of asset management products across mutual funds, portfolio management services and alternative investments.

Warning: This press release represents the views of Axis Asset Management Co. Ltd. and should not be relied upon as the basis of any investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited, nor Axis Asset Management Company Limited, its directors or associates shall be liable for any damages, including loss of income or loss of profits which may arise from reliance on the information contained in the present document. Investors are urged to consult their financial, tax and other advisers before making any investment decision. Statutory Details: Axis Mutual Fund was established as a trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability limited to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment manager: Axis Asset Management Co. Ltd. (the CMA). Risk Factors: Axis Bank Limited is not responsible for any loss or loss of profit resulting from the operation of the program. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. CMA reserves the right to make changes and alterations to this statement as needed from time to time.

The above information is included for general information only and does not constitute legal or tax advice. Given the individual nature of the tax consequences, each investor is advised to consult their own tax adviser regarding the specific tax implications arising from their participation in the Scheme. The mutual fund and unitholder tax benefits are in accordance with applicable tax laws as certified by the mutual fund consultant. Any action taken by you based on the information contained herein is your sole responsibility. Axis Mutual Fund will in no way be liable for the consequences of such action on your part. The information contained herein is not intended to constitute an offer or solicitation for the purchase and sale of any Axis Mutual Fund scheme.

Past performance may or may not be sustained in the future.

Stock(s) / Issuer(s) / Top stocks mentioned above are indicative only and should not be construed as a recommendation.

Investments in mutual funds are subject to market risk, read all plan documents carefully.


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