Axis Mutual Fund has launched the Nifty 500 Index Fund, a new offering designed to provide investors with broad market exposure. If you are looking for a mutual fund investment opportunity, look out for the Axis Nifty 500 Index Fund NFO. This fund aims to replicate the performance of the Nifty 500 Index, which represents the top 500 companies listed on the NSE, offering diversified exposure across various sectors.
- Fund Name: Axis Nifty 500 Index Fund
- NFO Period: June 26, 2024 to July 9, 2024
- Benchmark Index: Nifty 500 Index
- Minimum Investment: ₹500 (lump sum)
The primary objective of the Axis Nifty 500 Index Fund is to generate returns that closely correspond to the total returns of the Nifty 500 Index, subject to tracking errors. The fund seeks to achieve this objective by investing in the constituent stocks of the Nifty 500 Index in the same proportion as the index.
1. Diversification: The Nifty 500 Index includes companies from various sectors, providing a diversified investment portfolio.
2. Market Representation: It covers a significant portion of the market capitalisation of NSE-listed companies, giving investors broad market exposure.
3. Cost-Effective: Index funds generally have lower expense ratios compared to actively managed funds due to their passive management style.
The fund will follow a passive investment strategy, aiming to replicate the performance of the Nifty 500 Index. This involves investing in all the stocks that constitute the index in the same proportion as their weightage in the index.
- Equity and Equity-Related Instruments: 95-100% (primarily the constituents of the Nifty 500 Index)
- Debt and Money Market Instruments: 0-5% (for liquidity management)
The Axis Nifty 500 Index Fund is suitable for:
- Investors seeking diversified exposure across various sectors and companies.
- Long-term investors looking for capital appreciation with broad market coverage.
- Those who prefer a passive investment approach with lower costs.
1. Broad Market Exposure: Investing in the top 500 companies provides extensive market coverage.
2. Lower Volatility: Diversification across multiple sectors can help reduce portfolio volatility.
3. Ease of Investment: The minimum investment requirement of ₹500 makes it accessible to a wide range of investors.
1. Market Risk: The fund is subject to overall market risks, and returns can fluctuate with market movements.
2. Tracking Error: The performance of the fund may deviate slightly from the benchmark index due to tracking errors.
3. Economic Factors: Broad market funds are affected by macroeconomic factors and sector-specific issues.
The Axis Nifty 500 Index Fund offers an excellent opportunity for investors seeking diversified exposure to the Indian equity market. With its focus on the Nifty 500 Index, the fund aims to provide stable returns with reduced risk through broad market coverage. As with any investment, potential investors should consider their risk tolerance and investment goals before investing.
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