Axis Mutual Fund targets Rs 80-100 crore from NFO

The Axis Mutual Fund expects its open-ended scheme Axis Nifty 50 Index Fund to garner Rs 80-100 crore, reports said.

Launched on November 10, the Axis Nifty 50 Index Fund will track the Nifty 50 index and give investors the opportunity to passively participate in the large-cap universe.

The new fund offer will be open for subscription between November 15-29 and requires a minimum application of Rs 5,000.

The fund house targets a corpus of Rs 80-100 crore, Jinesh Gopani, Head of Equity at Axis Mutual Fund, told news agency PTI. Gopani will manage the Axis Nifty 50 Index Fund, the asset management company said.

The fund will invest in Nifty 50 Index stocks across 13 categories in the same proportion as their weightages in the index. This will benefit investors as they will gain from diversification and investments in large-cap blue-chip firms. Also, the mutual fund structure gives investors a variety of systematic investment options like SIPs, STPs & Flexi SIP/STP apart from lumpsum investments.

“Axis Nifty 50 Fund’s low friction investment strategy that relies on broader market wisdom coupled with the principle of ‘quality & growth’ philosophy will yield wealth creation opportunities for investors," said Chandresh Nigam, Managing Director and CEO, Axis AMC.

According to experts, the fund is ideal for those looking for long-term wealth creation options and market-linked equity returns, Financial Express reported.

Compared to an active fund, passive funds do not require active participation of a fund manager to choose stocks for the fund. This makes it easier to invest in passive funds than active funds. Also, passive funds have a low expense ratio, which makes them popular among Indian investors.

An expense ratio measures the administrative and other operating costs of a fund. As financial managers do not have to do research to move funds in various securities, passive funds are less expensive. Higher operating expenses reduce the fund's assets and give lower returns to investors. Performance of passive funds is also more predictable as they replicate the index. All these factors make passive funds more attractive to the investors.

Axis Mutual Fund had launched the Axis Nifty Exchange Traded Fund (ETF) in July 2017, which held assets worth Rs 56 crore on September 30 and delivered a nearly 46 percent return on a one-year basis, Mint reported.