The open-ended scheme will invest in constituents of Crisil IBX 50:50 Gilt Plus SDL Index-June 2028. Minimum investment is Rs 5,000 and in multiples of Re. 1 thereafter. NFO closes on January 16
Axis Mutual Fund on December 4, 2023, announced the launch of Axis Crisil IBX 50:50 Gilt Plus SDL June 2028 Index Fund. It is an open-ended target maturity index fund that will invest in constituents of CRISIL IBX 50:50 Gilt Plus SDL Index – June 2028.
The new fund offer (NFO) will remain open from January 5 to January 16, 2023. The minimum investment will be Rs 5,000 and in multiples of Re. 1 thereafter.
Axis Mutual Fund announced in a press release that the fund will offer a high interest rate risk and relatively low credit risk. The expected scheme maturity date is June 30, 2028. There is no exit load.
Axis Mutual Fund said that the investment objective of the scheme will be to provide investment returns corresponding to the total returns of the securities as represented by the CRISIL IBX 50:50 Gilt Plus SDL Index – June 2028 before expenses, subject to tracking errors.
“The open-ended nature of such a fund means that investors can use systematic investment and withdrawal facilities to tailor entry and exit in the fund to meet investor objectives. Further, these funds do not have lock-ins, and hence, provide liquidity to investors, should they wish to redeem mid-term without any hassles,” Axis Mutual Fund said in the press release.
According to Axis Mutual Fund, the scheme would allocate 95-100 per cent of its underlying securities in debt Instruments comprising CRISIL IBX 50:50 Gilt Plus SDL Index – June 2028 (in the same weightage as in the Index) and the remaining in debt and money Market instruments (only treasury bills and government securities having a residual maturity up to one year).
The scheme will follow buy and hold investment strategy in which debt instruments by government securities (G-Sec and state government securities) will be held till maturity unless sold for meeting redemptions/rebalancing, Axis Mutual Fund further said in the press release.
According to Axis Mutual Fund, the scheme is suitable for those wanting to invest in a high quality portfolio with minimal default risk and looking for income over the long term.
It said that with the Reserve Bank of India (RBI) raising policy rates by 225 basis points (bps) between April and December 2022 to combat inflation, there is an opportunity for investors to lock in rates over the 5-year investment horizon.
The fund is also passively managed, and there is no bias in security selection, Axis Mutual Fund further said in the statement.
Chandresh Nigam, managing director and CEO, Axis AMC said: “The current yield curve presents material opportunities to the investor with a medium- to long-term investment horizon. As a fund house that believes in ‘responsible investing’, we believe that the Axis CRISIL IBX 50:50 Gilt Plus SDL June 2028 Index Fund will be a notable add-on to the investor’s passive debt portfolio. As a passive fund, the product aims to replicate a designated index created by reputed index providers. Further, the ‘held-to-maturity’ nature of target maturity strategies aims to minimise duration risk for investors who remain invested through the life of the fund.”