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Axis Mutual Fund Launches Axis Nifty Bank Index Fund

18 September 20246 mins read by Angel One
In the following article we shed light on the NFO's objectives, fund allocation, fund managers, and peer performance.
Axis Mutual Fund Launches Axis Nifty Bank Index Fund
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Axis Mutual Fund launched a new open-ended index fund called Axis Nifty Bank Index Fund. This fund aims to track the total returns of the Nifty Bank TRI index, providing exposure to the leading Indian banks. The New Fund Offer (NFO) is open for subscription from May 3rd to May 17th, 2024. There is no entry load, but an exit load of 0.25% applies if redeemed or switched out within 7 days of investment. The minimum investment amount is Rs 500.

Investment Objective

The investment objective of the Axis Nifty Bank Index Fund is to provide returns before expenses that correspond to the total returns of the Nifty Bank TRI subject to tracking errors. However, there is no assurance that the investment objective of the Scheme will be achieved.

This NFO of Axis Nifty Bank Index Fund is suitable for investors who are seeking long-term wealth creation solution and to track returns by investing in a basket of Nifty Bank TRI stocks and aims to achieve returns of the stated index, subject to tracking error.

Risk-o-meter:

Risk-o-meter

Funds Allocation

Investments Indicative Allocation Risk Profile
Securities covered by Nifty Bank TRI Minimum 95% – Maximum 100% Very high
Debt & Money Market Instruments Minimum 0% – Maximum 5% Low to Moderate

Benchmark

The performance of the Axis Nifty Bank Index Fund is benchmarked against the Nifty Bank TRI.

Fund Managers

Mr. Karthik Kumar is a fund manager with 10 years of experience. He holds an impressive educational background including an M.B.A from the Krannert School of Management at Purdue University (USA), a C.F.A (USA) certification, and a B.E (Mechanical) degree from Sardar Patel College of Engineering, Mumbai University.

Mr. Ashish Naik is a fund manager with 10 years of experience. He is qualified with a B.E Computers degree from Mumbai University, a PGDBM from XLRI, and an FRM (GARP) certification.

Peer Comparison

Scheme Name Launch Date AUM (Crore) Expense Ratio (%) Returns as on – 02-05-2024 in %
2024 2023 2022 2021 2020
Motilal Oswal Nifty Bank Index Reg 05-09-2019 557.62 0.99 1.58 12.17 20.87 12.28 -3.85
Navi Nifty Bank Index Fund Reg Gr 31-01-2022 507.16 0.79 1.61 11.97
All Index Fund 6.89 21.46 1.91 27.96 15.29
Kotak Nifty Bank ETF 04-12-2014 5047.80 0.16 1.87 13.05 21.76 13.6 -4.37
Nippon India ETF Nifty Bank BeES 27-05-2004 6191.31 0.19 1.87 13.15 21.83 13.65 -4.27
SBI Nifty Bank ETF 01-03-2015 4217.88 0.2 1.87 13.12 21.84 13.68 -4.22
ABSL Nifty Bank ETF 20-10-2019 2630.04 0.17 1.87 13.15 21.85 13.71 -3.27
Axis NIFTY Bank ETF 12-11-2020 192.06 0.18 1.87 13.07 21.78 14.09
HDFC NIFTY Banking ETF Gr 01-08-2020 2324.60 0.16 1.88 13.08 21.81 13.58
ICICI Pru Nifty Bank ETF 05-07-2019 3185.63 0.15 1.89 13.15 21.9 13.76 -3.61
UTI Nifty Bank ETF 05-09-2020 3118.51 0.16 1.89 13.19 22.02 13.71
All ETFs 8.16 24.46 3.44 21.68 13.63

Data as of May 02, 2024.

Management Commentary

“India’s economic rise is a compelling narrative driven by several factors. If addressed effectively, our growth story has the potential to propel the nation towards becoming a major global economic power. Against this backdrop, India’s banking sector continues to exhibit growth and resilience,” remarked B. Gopkumar, MD & CEO, Axis AMC. “Fuelled by robust regulatory frameworks and the rapid adoption of digital banking, the sector is well-positioned for sustained expansion. The Axis Nifty Bank Index Fund offers investors a strategic opportunity to tap into this growth opportunity. The sector benefits from strong emphasis on innovation and adherence to the highest governance standards, thereby capitalizing on the transformative trends reshaping India’s banking landscape.”

“This fund is an interesting opportunity for investors to gain exposure to the banking sector, which is expected to play a pivotal role in India’s economic expansion,” explained Mr. Ashish Gupta, Chief Investment Officer at Axis AMC. “With increasing financial inclusion and a shift towards more sophisticated banking services, the sector can offer the potential for significant returns”.

Characteristics of Index Funds

  • Tracks a market index, aiming to mirror its performance.
  • Passively managed, with low fees compared to actively managed funds.
  • Offers broad diversification across multiple companies and sectors.
  • Targets long-term growth, matching the overall market’s returns.
  • Generally, less volatile than individual stocks, but still susceptible to market risk.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.

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