Axis launches Nifty 100 Index Fund
New Fund Offer(NFO) – Axis Launches Nifty 100 Index Fund
Axis Mutual launched a new scheme – Axis Nifty 100 Index Fund on September 27th. As the name suggests, it is an open-ended index fund that tracks the Nifty 100 Index.
The top 100 stocks in the Nifty comprise only of large cap stocks as per the definition provided by SEBI (Securities and Exchange Board of India).
The NFO (New Fund Offer) has opened for subscription on 27th Sep 2019 and will close on 11th Oct 2019. The minimum application amount for the Axis Nifty 100 Index Fund is INR 5000 and in multiples of Re. 1 thereafter.
| NFO Name | Axis Nifty 100 Index Fund |
| NFO Launch Date | 27th Sep 2019 |
| Last date for application | 11th Oct 2019 |
| Minimum Investment Amount | Rs. 5000 and in multiples of Re. 1 thereafter |
| Category | Index Fund |
| Nature | Open-ended |
| Mode of Investment | SIPs, STPs, FlexSIP/ STP, Lump sum |
| Fund Manager | Ashish Naik |
| Risk | Moderately High |
| Benchmark | NIFTY 100 TRI Index |
| Exit Load | If redeemed within 7 days from the date of investment, then 1%, else Nil |
Investment Objective
The fund is suitable for investors seeking long term wealth creation. The investment objective of the scheme is to seek to track the basket of Nifty 100 stocks and aim to generate returns of the stated index, subject to tracking error.
Under normal conditions, 95-100% of the portfolio allocation will be in stocks in the Nifty 100, while 0-5% allocation can be in debt and other money market instruments.
Suitability of Index Investing
Index investment has been gaining traction not just across the globe but also in India in the recent years because of the following reasons:-
- Low cost option to participate in a particular segment of market;
- Index investing removes the risk of security selection as it mimics the index;
- Such type of investment relies on the broader market wisdom and hence takes care of not taking unnecessary or biased decisions during market mayhem;
Given the threefold benefit as highlighted above, Axis Nifty 100 Index Fund is suitable for long term investors.
Steps for investing in the NFO
One has to follow the below mentioned steps for investing into the fund:-
Step 1: Login/ Signup to your Groww account.
Step 2: Decide on the particular amount of investment into the NFO;
Step 3: Finally, Visit new fund Axis Nifty 100 Index Fund offered by Axis Mutual Fund and start investing.
Before subscription, you need to remember that the minimum investment amount is Rs. 5000 and an exit load of 1% if redeemed within 7 days will be applicable from the date of investment.
Fund Manager Details
The fund is managed by Mr. Ashish Naik who has more than 14 years of experience in the finance industry, with over 10+ years in Axis MF. He is a qualified CFA and FRM. He has completed his PGDBM from XLRI, Jamshedpur in Finance and Marketing. Prior to working with Axis MF, he was with Goldman Sachs.
Based on the fund mandate, he has handled both benchmark agnostic as well as benchmark aware strategies.
Industry Composition and Investor Suitability
Nifty 100 Index comprises of 100 stocks spread across 16 industries. It has beaten the Nifty 50 Index in 8 out of the last 10 financial years and hence has a good chance of beating as well as generating double digit returns at minimum possible expense ratio.
Therefore, individuals who have a very long term horizon in mind and are not willing to take risks associated with mid and small caps can consider this fund. Generally, large caps are more stable than mid and small caps. Therefore spreading your investments across almost all large cap companies will further diversify your risks. Many index funds have beaten the returns generated by large cap oriented funds. Besides, Axis Nifty 100 Index Fund will track the behaviour of combined portfolio of two indices, Nifty 50 and Nifty Next 50. Therefore, this fund will provide investors the benefit of established companies as well as the companies next in the line to be in the blue chip category.
Top 5 Sector Compositions
| Sector | Weight (%) |
| Financial Services | 37.3% |
| IT | 13.5% |
| Energy | 13.4% |
| Consumer Goods | 12.7% |
| Automobiles | 5.7% |
Top 5 constituents
| Company | Weight (%) |
| HDFC Bank Ltd. | 9.3% |
| Reliance Industries Ltd. | 8.3% |
| HDFC Ltd. | 7.2% |
| Infosys Ltd. | 6.0% |
| ICICI Bank Ltd. | 5.1% |
Conclusion
Based on the inputs and description of Axis Nifty 100 Index Fund, it is clear that it mostly suits investors with moderate risk appetite and a long term horizon. Diversification is taken care of as it takes exposures in nearly 100 stocks. Besides, the fund manager know-how and minimum expense ratio add to its benefits.
Investors who are not comfortable investing in NFO due to fund liquidity as well as track record can always look for the available opportunities in the market. Lastly, the investment should always synchronize with your long term goals.