Axis Mutual Fund Launches Axis Nifty G-Sec September 2032 Index Fund, NFO Opens Today

Axis Mutual Fund has announced the launch of the Axis Nifty G-Sec September 2032 Index Fund.

The open-ended target maturity debt index fund will invest in constituents of the Nifty G-Sec September 2032 Index, which it will also follow as the benchmark.

The new fund offer will open on March 6, 2023 and close on March 13, 2023. The minimum investment will be Rs. 5,000, and in multiples of Re. 1, thereafter. There is no exit load.

Axis asset management company (AMC) announced in a press release that the investment objective will be to provide investment returns corresponding to the total returns of the securities as represented by the NIFTY G-Sec September 2032 Index before expenses, subject to tracking errors. However, there is no assurance that the investment objective of the scheme will be achieved, it said.

The scheme will essentially invest in Government securities (G-secs), such as treasury bills, floating rate bonds, zero coupon bonds, capital indexed bonds, among others. The scheme will allocate 95-100 per cent of its portfolio to debt instruments comprising of the NIFTY G-sec September 2032 Index and the remaining in debt and money market instruments.

Axis AMC said that the scheme offers a relatively high interest rate risk and relatively low credit risk. It is suitable for investors looking for income over the long term, and in a scheme that seeks to provide investment returns corresponding to the total returns of the securities as represented by the scheme’s underlying index.

“Being a target maturity fund, it will allow investors to access specific maturity buckets. The transparent nature of such a strategy provides investors a clear picture of the portfolio and the instrument mix. As a passive fund, the Axis NIFTY G-Sec September 2032 Index Fund aims to replicate a designated index created by reputed index providers. 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,” Axis AMC said in a press 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. Axis NIFTY G-Sec September 2032 Index Fund gives an opportunity to investors to invest in a high quality portfolio with minimal default risk. The newly launched scheme will be an important add on to Axis Mutual Fund’s portfolio of passive debt offerings.”