Axis CRISIL-IBX AAA Bond Financial Services - Sep 2027 Index Fund - Direct (G): NFO Details

Investment Objective and Strategy

Objective:

The investment objective of the scheme is to provide investment returns before fees and expenses that closely corresponding to the total returns of the securities as represented by the CRISIL-IBX AAA Financial Services Index – Sep 2027, subject to tracking error/ tracking difference. 

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There is no assurance that the investment objective of the Scheme will be achieved.

Investment Strategy:

The Axis CRISIL-IBX AAA Bond Financial Services – Sep 2027 Index Fund - Direct (G) employs a passive investment strategy aimed at closely tracking the performance of the CRISIL-IBX AAA Financial Services Index – Sep 2027. This strategy involves:

Replication of the Underlying Index: The fund invests 95-100% of its assets in fixed-income instruments that mirror the constituents of the CRISIL-IBX AAA Financial Services Index – Sep 2027. 

Buy and Hold Approach: Adopting a buy-and-hold strategy, the fund retains debt instruments issued by the financial services sector until their maturity, unless adjustments are necessary for redemptions or rebalancing. 

Credit Quality Focus: The fund emphasizes high-quality, AAA-rated securities, aiming to minimize credit risk and provide stable returns. 

Defined Maturity: With a target maturity date of September 2027, the fund offers investors a clear investment horizon, aligning with the maturity of the underlying index. 

This structured approach is designed to offer predictable returns with moderate interest rate risk and relatively low credit risk, making it suitable for investors seeking income over a defined period.

Why Invest in Axis CRISIL-IBX AAA Bond Financial Services - Sep 2027 Index Fund - Direct (G)?

Investing in the Axis CRISIL-IBX AAA Bond Financial Services – Sep 2027 Index Fund - Direct (G) offers several advantages:

High Credit Quality: The fund invests primarily in AAA-rated bonds issued by financial services companies, ensuring exposure to high-quality debt instruments.

Defined Maturity: With a target maturity of September 2027, the fund provides a clear investment horizon, allowing investors to plan their financial goals accordingly.

Predictable Returns: By holding bonds until maturity, the fund aims to offer stable and predictable returns, making it suitable for conservative investors seeking steady income.

Tax Efficiency: If held for more than three years, investments in this fund qualify for long-term capital gains tax with indexation benefits, potentially enhancing post-tax returns.

Low-Cost Passive Investment: As an index fund, it follows a passive investment strategy, typically resulting in lower expense ratios compared to actively managed funds.

These features make the fund an attractive option for investors seeking a low-cost, tax-efficient, and predictable income stream over a defined period.

Strength and Risks - Axis CRISIL-IBX AAA Bond Financial Services - Sep 2027 Index Fund - Direct (G)

Strengths:

The Axis CRISIL-IBX AAA Bond Financial Services – Sep 2027 Index Fund - Direct (G) offers several strengths that make it an attractive investment option:

High Credit Quality: The fund invests primarily in AAA-rated bonds issued by financial services companies, ensuring exposure to high-quality debt instruments. 

Defined Maturity: With a target maturity of September 2027, the fund provides a clear investment horizon, allowing investors to plan their financial goals accordingly. 

Predictable Returns: By holding bonds until maturity, the fund aims to offer stable and predictable returns, making it suitable for conservative investors seeking steady income. 

Tax Efficiency: If held for more than three years, investments in this fund qualify for long-term capital gains tax with indexation benefits, potentially enhancing post-tax returns. 

Low-Cost Passive Investment: As an index fund, it follows a passive investment strategy, typically resulting in lower expense ratios compared to actively managed funds. 

These features make the fund an attractive option for investors seeking a low-cost, tax-efficient, and predictable income stream over a defined period.

Risks:

Investing in the Axis CRISIL-IBX AAA Bond Financial Services – Sep 2027 Index Fund - Direct (G) entails certain risks that investors should consider:

Interest Rate Risk: The fund's value is sensitive to changes in interest rates. An increase in interest rates can lead to a decline in the market value of the underlying bonds, potentially affecting the fund's returns.

Credit Risk: Although the fund invests in AAA-rated securities, which are considered high quality, there remains a minimal risk of credit downgrades or defaults by issuers, which could impact the fund's performance.

Liquidity Risk: In certain market conditions, the fund may face challenges in buying or selling securities without significantly affecting their prices, which could impact the fund's ability to meet redemption requests promptly.

Tracking Error: As an index fund, it aims to replicate the performance of the CRISIL-IBX AAA Financial Services Index – Sep 2027. However, factors such as fund expenses, cash holdings, and market movements can cause deviations from the index's performance, known as tracking error.

Reinvestment Risk: The fund may receive interest payments or principal repayments before the target maturity date. Reinvesting these proceeds at lower prevailing interest rates could result in lower overall returns.

Investors should assess these risks in relation to their individual risk tolerance and investment objectives before investing in this fund.