NFO launch | Axis S&P 500 ETF Fund of Fund opens for subscription: Check key features

Fund of funds can be an interesting entry point for new as well as seasoned investors. In addition to diversification, investors may also benefit from the meticulously structured risk mitigation techniques.

Following a passive investment strategy, the Axis S&P 500 ETF Fund of Fund endeavours to invest at least 95 percent of the net assets in units/shares of overseas Exchange Traded Funds replicating S&P 500 TRI, subject to the availability of eligible investment amount and the remaining in debt and money market investments, Axis Mutual Fund said.

The indicative list of overseas exchange traded funds in which the scheme proposes to invest is as follows:

iShares Core S&P 500 UCITS ETF

HSBC S&P 500 UCITS ETF

SPDR® S&P® 500 UCITS ETF

The list of overseas Exchange Traded Funds provided is indicative and the scheme can invest in any other overseas Exchange Traded Fund which shall have similar investment objective, investment strategy and benchmark, the fund house said.

Therefore, the investment objective of the newly launched fund is to replicate the performance of the S&P 500 TRI by investing in Exchange Traded Funds replicating S&P 500 TRI, subject to tracking errors. However, there can be no assurance that the investment objective of the scheme will be achieved. Given the mutual fund structure, investors can look to invest through various systematic options like SIPs, STP’s & lumpsum investments, it said.

Global Exposure: Since the S&P 500 index tracks the performance of 500 large companies listed on the US stock exchange, investors can gain global exposure. Furthermore, the index evolves as the US markets evolves with changing sectoral dynamics.

Sector Agnostic Representation: The Index potentially aims to provide broad based exposure across all sectors.

Low Cost Passive Exposure: Avenue to take low cost exposure in US market and also potentially benefit from INR depreciationChandresh Nigam, MD & CEO, Axis AMC said, “ETFs are soon becoming popular amongst the various vehicles of investing in passive strategies in India. In India, fund of funds can be considered as an interesting entry point for investors with a longer investment horizon and who wish to diversify their portfolio from a global standpoint."