The open-ended scheme will track the Nifty 50 index and allow investors to passively participate in the large cap universe, the fund house said, adding the new fund opens on November 15 and closes on November 29.
The Axis Nifty 50 index fund will be managed by Jinesh Gopani, the head of equities at the fund house, who confirmed the corpus target of the fund to PTI.
The passive strategy of the fund seeks to replicate the Nifty 50 by investing in a basket of the index stocks across 13 categories in the same proportions as their weightages in the index.
Through a single index, investors can benefit from diversification and quality investments in large cap blue-chip companies. Given the mutual fund structure, investors can look to invest through various systematic options like SIPs, STPs and flexi SIPs/STPs in addition to lumpsum investments, Gopani said.
Passively managed index funds have started gaining significance due to the potential of the returns from the benchmarks. In addition to lower expense ratios and the lower tracking error, index funds offer complete transparency of the portfolio composition.
As they replicate the index and do not carry out any security selection, passive funds provide more predictability in terms of their performance in different phases of the market.
Commenting on the new fund launch, Chandresh Nigam, MD and CEO of the fund house said, the low friction investment strategy of the new fund which relies on broader market wisdom coupled with the principle of quality and growth philosophy, will yield wealth creation opportunities for investors.
