What Is Axis Equity ETF FOF?

Axis Mutual Fund has recently launched a brand new NFO (New Fund Offer) in the month of February 2022. They are planning to get as many investors as possible so that these investors can benefit from this brand new NFO. This new NFO is considered to be one of the best schemes released by Axis Mutual Fund. The name of this new NFO is Axis Equity ETF FOF. Here, investors are expected to get the best of both stock market as well as mutual funds as this is an exchange traded fund that is also a fund of fund.

Axis Equity ETF FOF will be managed by Mr. Shreyash Devalkar, who has 17 years of work experience and is current handling several other existing mutual fund schemes for Axis Mutual Fund. Axis Equity ETFs FoF is an open-ended fund of fund scheme predominantly investing in units of domestic equity ETFs.

According to Axis Mutual Fund website, the investment objective of this mutual fund scheme is provide long-term capital appreciation from a portfolio investing predominantly in units of domestic equity ETFs. There is no assurance that the investment objective of the Scheme will be realized. However, there can be no assurance that the investment objective of the Scheme will be realized.

Axis Equity ETFs FoF will track the Nifty 500 TRI as its underlying benchmark and endeavor to generate returns by investing the majority of its investible corpus in domestic equity ETFs. The fund manager along with his team of analysts and market researchers will make the investment decision basis their audit and top-down investment view. Since this is a fund of fund scheme, investors will get the advantage of diversification just not within the stocks of one ETF, but multiple equities exchange traded funds. They will also get the added advantage of investment views of multiple fund managers of ETFs in which this FOF will be investing. Investors will have a minimum of 95% all time exposure to domestic equity ETFs. Since this fund invests in equity ETFs, they will get exposure to stocks belonging to all types of market capitalizations spread across various sectors and industries.

Investors are also blessed with the advantage of risk mitigation as the portfolio of Axis Equity ETF FOF is spread across domestic equity markets. The fund will aim to generate maximum alpha by tracking the performance of the securities of its underlying index while trying to keep tracking errors to a minimum. Since this is an equity oriented ETF FOF scheme, all tax implications applicable to equity mutual funds will imply this scheme as well.

Investors must understand that this is a very high risk investment scheme and will have a lock-in period of 15 days during which if investors redeem their investments, they will be charged an exit load of 1%. The minimum investment sum to invest in this NFO is Rs 5000. There will also be a SIP option but not during the NFO period. The AMC may offer the SIP option after the fund goes live.

Axis Equity ETF FOF NFO is live for subscription till 18th Feb 2022. In case you miss the opportunity to invest during the NFO period you can still invest after the fund goes live on the Axis Mutual Fund website.