Axis Mutual Fund on March 10, 2023 announced the launch of the Axis S&P BSE Sensex ETF. It is an open-ended exchange-traded fund (ETF) that will track the S&P BSE Sensex TRI.
The new fund offer (NFO) opened for subscription on October 10, 2023 and will close on March 15, 2023. The minimum investment amount is Rs. 5,000, and in multiples of Re. 1, thereafter, Axis Asset Management Company (AMC) announced in a press statement.
Axis AMC said the investment objective of the scheme will be to provide returns corresponding to the total returns of the S&P BSE Sensex TRI Index, subject to tracking errors. The scheme will invest in stocks forming part of the underlying index in the same ratio as per the index to the extent possible.
“Essentially, 95-100 per cent 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, it will follow a passive investment strategy, except to the extent of meeting liquidity and expense requirements,” Axis AMC announced in a press statement.
According to Axis AMC, the scheme is suitable for investors who are seeking a long-term wealth creation solution, and wish to invest in a scheme that tracks returns by investing in a basket of S&P BSE Sensex TRI stocks.
Axis AMC said since the scheme will invest and maintain domestic ETF exposure greater than 95 per cent of net assets at all times, the resulting tax treatment will be that of equity mutual funds.
“ETFs are 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. Given the mutual fund structure, investors can look to invest through various systematic options like systematic investment plans (SIPs), systematic transfer plans (STPs) and lump sum investments,” Axis AMC further said.
Axis AMC said the scheme offers several benefits of low cost investment, elimination of bias (as the fund invests in the underlying index), equity taxation, and lastly, minimal tracking error, as the fund aims to replicate the benchmark.
Chandresh Nigam, managing director and CEO, Axis AMC said in a press statement, “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 and growth’ philosophy to yield wealth creation opportunities for investors.”
