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Axis Mutual Fund, one among the fastest growing fund houses in India, announced the launch of their New Fund Offer – Axis S&P 500 ETF Fund of Fund (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. Mr. Vinayak Jayanath would be managing the fund and 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

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. Fund of Funds can be an interesting entry point for new as well as seasoned investors. In addition to diversification, investors may also benefit from the meticulously structured risk mitigation techniques.

Axis S&P 500 ETF Fund of Fund

Following a passive investment strategy, 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

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. (Please refer to SID for detailed Asset Allocation & Investment Strategy and other scheme related features available at www.axismf.com)

Therefore, 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. Given the mutual fund structure, investors can look to invest through various systematic options like SIPs, STP’s & lumpsum investments.

Some Key Attributes of the Fund include:

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 & 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.”

Highlights:

Category: An open ended fund of fund investing in Exchange Traded Funds replicating S&P 500 TRI, subject to tracking errors

Benchmark: S&P 500 TRI (INR)

Fund Manager: Mr. Vinayak Jayanath

NFO open date: 22^nd March 2023

NFO close date: 05^th April 2023

Minimum Investment: Rs. 500 and in multiples of Re. 1/- thereafter

Exit Load:

If redeemed/switched-out within 30 Days from the date of allotment – 0.25%

If redeemed/switched-out within 30 Days of allotment – Nil

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