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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 BSE Sensex ETF (An Open Ended Exchange Traded Fund Tracking S&P BSE Sensex TRI). Mr. Ashish Naik (Fund Manager) would be managing the fund and the minimum investment amount is Rs. 5,000 and in multiples of Re.1/- thereof. The new fund will track the S&P BSE Sensex TRI benchmark and endeavour to generate alpha by investing in domestic equity ETFs basis the fund manager’s top down investment view.

ETFs are soon becoming one of the most popular vehicles of investing in passive strategies as they replicate the portfolio of the underlying index while trading in bite sized units on an exchange at market determined prices. 

Axis S&P BSE Sensex ETF

The investment objective of the Axis S&P BSE Sensex ETF is to provide returns before expenses that correspond to the total returns of the S&P BSE Sensex TRI Index subject to tracking errors. However, there is no assurance that the investment objective of the scheme will be achieved. The Scheme endeavours to invest in stocks forming part of the underlying index in the same ratio as per the index to the extent possible. Essentially, 95% to 100% of the investments will be made in Equity instruments covered by S&P BSE Sensex TRI and the remaining in Debt and Money Market investments. To that extent follows a passive investment strategy, except to the extent of meeting liquidity and expense requirements. (Please refer to SID for detailed Asset Allocation & Investment Strategy and other scheme related features available at www.axismf.com).

As the scheme aims to invest and maintain domestic ETF exposure greater than 95% of net assets at all times, the resulting tax treatment will be that of equity mutual funds. 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:

* Low cost passive investment solution - A hassle free solution for investors looking for a low cost equity product

* Elimination of bias - As the fund invests in the underlying index, it eliminates fund manager bias while purchasing/selling securities

* Equity taxation - As all investments will be made in Equity instruments covered by S&P BSE Sensex TRI, the scheme is subject to Equity taxation

* Endeavour for minimal tracking error - The passively managed fund endeavours for minimal tracking error as it aims to replicate the benchmark

Chandresh Nigam, MD & CEO, Axis AMC said, “Passive investing’s efficient low cost strategies that focus on tracking a specific index while relying on the broader market wisdom, have been some of the major reasons for its increased importance amongst the investors. With the launch of the Axis S&P BSE Sensex ETF, we are aiming to create a low friction investment strategy that relies on broader market wisdom coupled with our principle of ‘quality & growth’ philosophy to yield wealth creation opportunities for investors.”

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