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Axis Mutual Fund has launched a new index fund, Axis Nifty Midcap 50 Index Fund, that replicates the Nifty Midcap 50 Index.
The New Fund Offer (NFO) period for the Axis Nifty Midcap 50 Index Fund is from March 10th 2022 to March 21st 2022. The Axis Nifty Midcap 50 Index Fund regular growth re-opens for continuous repurchases and sales after five days from the date of allotment.

Objective
The fund’s investment objective is to provide returns before expenses that closely correspond to the total returns of the NIFTY MIDCAP 50 subject to tracking errors. However, there can be no assurance that the scheme’s investment objective will be achieved.

Axis Nifty Midcap 50 Index Fund NFO Details

Fund NameAxis Nifty Midcap 50 Index Fund
NFO Opening DateMarch 10th 2022
NFO Closing DateMarch 21st 2022
Re-open DateAfter five days from the date of allotment
Type of FundOpen-ended Index Scheme
Fund ManagerMr Jinesh Gopani
Minimum Investment AmountINR 5,000
Minimum Additional Purchase AmountINR 1,000
Exit Load0.25% for 7 days
SuitabilityVery High
BenchmarkNifty Midcap 50 Index TRI
Plans and OptionsRegular Plan & Direct Plan
NOTE:
  • All the investment amounts should be multiple of INR 1/-
  • Minimum SIP/SWP/STP for monthly frequency is INR 1,000/-

Who Can Invest in Axis Nifty Midcap 50 Index Fund?

Axis Nifty Midcap 50 Index Fund is an index fund that invests in 50 midcap companies tracked by the Nifty Midcap 50 Index. Midcap stocks offer good potential for growth while being prone to significantly higher risk. Thus, it is suitable for investors seeking long term wealth creation.

Therefore, investors seeking exposure to an equity scheme and midcap companies and are risk-takers can consider investing in the scheme. Moreover, the scheme offers good diversification by investing across 50 mid-cap stocks across different industries. Also, exposure to mid-cap funds makes the scheme highly volatile. Thus, investors with high-risk tolerance levels with a long term investment horizon (5+ years) can consider investing in the scheme.

Fund Manager

Mr Jinesh Gopani

Mr Gopani has more than 16 years of Capital Markets expertise, including eight years in equity fund management. He is presently the Head of Equity at Axis Mutual Fund. He holds an MMS finance degree from Mumbai University. Prior to joining Axis, he was with Aditya Birla Sun Life Asset Management Company and Voyager India Capital Private Limited. Also, at the Axis fund house, Mr Gopani manages 13 funds.

Asset Allocation

Axis Nifty Midcap 50 Index Fund aims to closely replicate the benchmark index with minimum tracking error. The following is the indicative asset allocation of the fund.

Types of InstrumentsIndicative Allocation MinimumIndicative Allocation MaximumRisk Profile
Equity and Equity Related securities covered by Nifty IT Index95%100%Medium to High
Debt and Money Market Instruments05%Low to Medium

As per the SEBI Regulations, the scheme may participate in securities lending. The following are limits for stock lending:

  1. Not more than 20% of the scheme’s net assets can generally be deployed in Stock Lending.
  2. Not more than 5% of the scheme’s net assets can generally be deployed in Stock Lending to any single counterparty (as may be applicable).

The Axis Nifty Midcap 50 Index asset allocation will be in the same proportion as the benchmark composition. The fund managers intend to maintain a low tracking error by actively managing the portfolio in line with the index.

Concluding Remarks

Axis Nifty Midcap 50 Index Fund replicates the Nifty Midcap 50 Index TRI performance. Also, this fund primarily invests in the same stocks and proportions as the Nifty Midcap 50 Index. Hence, the Axis fund aims to track the benchmark’s return closely with minimum tracking error. Since the fund invests across mid-cap stocks, it is a high-risk investment option. Moreover, investors must have a long-term investment approach to average out the short-term market volatility.

Investors who understand the category and can closely monitor the performance of the mid-cap stocks can consider investing in this scheme. Furthermore, the scheme is ideal for investors looking for exposure to midcaps. Also, the index fund structure is ideal for systematic investing. Moreover, investing in Axis Midcap 50 Index fund is a hassle-free and low cost investing solution.

Since it is a pure equity scheme and mid-cap focused, a long term investment horizon is a must. Also, as the fund does not guarantee returns, it is prudent to keep a close eye on the investments.

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