Nifty AAA Bond Financial Services Index Fund: NFO launched by Axis Mutual Fund
Axis Mutual Fund has introduced their new fund offer of Nifty AAA Financial Services Bond Mar 2028 Index, which is an open-ended target maturity index fund. This will invest in the units of Nifty AAA Financial Services Bond Mar 2028 Index with a moderate interest rate risk and relatively low credit risk.
The scheme opened for subscription on February 27, 2025 and will close on March 4, 2025. The minimum amount for investments is Rs.5,000 and in multiples of Rs. 1 thereafter. The objective of this scheme is to provide investment returns before fees and expenses that closely correspond to the total returns of the securities as represented by the Nifty AAA Financial Services Bond Mar 2028 index, subject to tracking error/tracking difference. The new fund will follow the Nifty AAA Financial Services Bond Mar 2028 Index benchmark
It adopts a buy-and-hold strategy in which the fund invests in debt instruments from the financial services sector and keeps them until they mature. It only sells them for redemption or rebalancing. As a passively managed fund, it reduces biases in security selection that enhance transparency and stability.
The fund will allocate 95% to 100% of its assets to fixed-income instruments tracking the index; the rest will be invested in debt and money market instruments to maintain liquidity.
The scheme is designed to offer a clear yield to maturity based on the underlying index. As per the report released by the fund house, the YTM of the index is at 7.69% as of February 25, 2025. The fund also offers flexibility during the entry and exit according to individual objectives. It allows investors systematic investment and withdrawal facilities.
B Gopkumar, managing director and chief executive officer of Axis AMC, has stated that the new scheme allows investors to invest in a high-quality, AAA-rated portfolio, ensuring safety and high quality. The fund aims to offer stable and predictable returns. It is suitable for those investors who are looking to balance risk and return over the fund’s term.
