NFO this week: Axis MF's NBFC-focused fund, SBI Nifty 500 Index Fund up for investment. Check details

NFO alert: Axis Mutual Fund (MF) has launched the "AXIS CRISIL-IBX AAA NBFC INDEX – JUN 2027 Fund", which is open-ended Target Maturity Index Fund that will put investors' money in the CRISIL-IBX AAA NBFC Index constituents, maturing in June 2027.

The fund's primary objective is to deliver investment returns that closely mirror the CRISIL-IBX AAA NBFC Index – June 2027 and hopes to offer moderate interest rate risk and relatively low credit risk. 

B. Gopkumar, MD & CEO of Axis AMC, said: "This is the first NBFC sector-based target maturity mutual fund scheme in India. It allows investors to participate in a high-quality portfolio with some degree of predictability."

Top highlights

> The new fund offer's (NFO's) launch window is open till September 23, 2024, with a minimum investment requirement of Rs 5,000 and in multiples of Rs 1 thereafter.

> The fund will offer exposure to high-quality, AAA-rated Non-Banking Financial Companies (NBFCs) through a passive investment strategy by tracking an index. It will allocate 95-100% of its assets in fixed-income instruments tied to the index, with a small portion reserved for liquidity through debt and money market instruments.

> The fund will have a "Buy and Hold" strategy, meaning Non-Banking Financial Company (NBFC) debt instruments will be held until maturity, barring any sales for redemptions or rebalancing.

> The fund managed by Aditya Pagaria will not have an exit load and will provide investors with flexible entry and exit options through systematic investment and withdrawal plans. This feature will particularly benefit individuals aiming to align their investments with specific financial objectives.

> The Axis CRISIL-IBX AAA NBFC Index - June 2027 Fund is marketed as a cost-effective, passive investment alternative that reduces security selection bias. As of September 9, 2024, the Index Yield to Maturity (YTM) stood at 8.12%. This makes the fund a simple yet robust choice for investors aiming for a hassle-free fixed-income product with a high-quality portfolio.

> The fund's maturity date is June 30, 2027, making it a medium-term investment option for those looking for a predictable and safe debt product.

SBI Nifty 500 Index Fund

SBI Mutual Fund has launched the SBI Nifty 500 Index Fund, which is a open-ended scheme replicating/ tracking Nifty 500 Index, as a part of its passive offering. The New Fund Offer (NFO) period for the scheme is September 17 – 24, 2024. The minimum application amount is Rs 5,000 and in multiples of Re 1 thereafter. The fund also has SIP facility with daily, weekly, monthly, quarterly, semi-annual, and annual investment frequency.

The scheme's investment objective is to provide returns corresponding to the total returns of the securities as represented by the underlying index, subject to tracking error. 

The Nifty 500 Index encompasses the top 500 stocks by market capitalization, covering approximately 92.1% of the market capitalization of all listed companies on the NSE. This index delivers a comprehensive snapshot of the Indian stock market’s dynamics. By tracking the Nifty 500 Index, this fund offers diversified access to established large-cap leaders, burgeoning mid-caps, and emerging small-cap firms.

"The SBI Nifty 500 Index Fund offers investors the opportunity to invest in companies across the entire Indian economy, encompassing over 92% of the total market cap of all listed companies. Investors who seek exposure to not only established large cap companies but also mid and small caps, passively and at a relatively lower cost can consider investing in this fund,” said Shamsher Singh, MD and CEO, SBI Funds Management Limited.

The scheme will predominantly allocate a minimum of 95% and a maximum of 100% of its funds into stocks that make up the Nifty 500 Index. Additionally, it may invest up to 5% in Government securities, such as G-Secs, SDLs, treasury bills, and other similar instruments authorized by the RBI, along with triparty repo agreements and units of liquid mutual funds.

"The SBI Nifty 500 Index Fund is an opportunity for those who want to invest in one fund encompassing established (large caps), growing (mid-caps) and young (small cap) businesses. What you get in effect is a proxy to the country’s listed universe of companies, spanning various sectors and a multicap-based offering in one index fund,” said D P Singh, Deputy MD and Joint CEO, SBI Funds Management Limited.