Axis Mutual Fund has revealed the debut of their new fund offer (NFO), the 'Axis Quant Fund,' an open-ended equity scheme based on a quantitative basis. The new fund seeks long-term capital appreciation by allocating largely in equities and equity-related assets based primarily on data-driven findings. Axis Quant Fund seeks to produce long-term profitability by employing a substantially driven rule-based stock selection strategy. Let's learn briefly about the scheme.
Features of Axis Quant Fund
The scheme's benchmark would be the S&P BSE 200 TRI, with a minimum investment amount of Rs 5,000 and subsequent investments in multiples of Rs 1. The scheme's specifics are as follows.
- The fund employs a fundamental data-driven bottom-up approach stock selection strategy that is backed with a systematic investment method. The fund's goal is to build a portfolio of 40-60 stocks by selecting equities using quantitative criteria and rebalancing the portfolio regularly.
- The fund will choose stocks based on core metrics such as growth, value, momentum, and quality, which will be screened using rule-based standards.
- The fund will distribute 80-100 per cent of its assets to equity and equity-related instruments of identified firms using a quantitative methodology, 0-20 per cent to other equity and equity-related securities, 0-20 per cent to debt and money market instruments, and 0-10 per cent to REIT and InvIT units.
- With a 5-year investment horizon, the product is appropriate for investors seeking long-term wealth gain.
- This fund can be purchased through Axis Mutual Fund Online, Axis Mutual Fund Mobile App, Mutual Fund Utility, Channel Distributors, Stock Exchange Channels, and other Online Mode or Mutual Fund Investment apps.
- Investors interested in SIPs can begin with a minimum SIP of Rs. 1,000/- and in multiples of Rs. 1/- every month. There is no upper limit to invest during or after the NFO period. For further purchases on an ongoing basis, the minimum amount would be Rs. 100 and in multiples of Rs. 1/- thereafter.
- During the NFO period and thereafter, the minimum initial investment for purchase/switch-in would be Rs. 5,000, and in multiples of Rs 1.
- The scheme, according to the fund house, would strive to develop an all seasons portfolio that includes the best of fundamental styles: quality, growth, and valuation. The scheme will enable the fund manager to build a portfolio that balances risk and return goals. The scheme also seeks to choose a portfolio of high-quality stocks with outstanding upside potential but low pricing.
- The fund will have a diverse portfolio spanning sectors and market size.
- The NFO will be open from June 11 till June 25.
Exit Load and Fund Managers
Deepak Agrawal and Hitesh Das will manage the fund. Mr Deepak Agrawal is an Equity Research Analyst with over 15 years of experience in the financial markets. Mr Hitesh Das, on the other hand, has over 9 years of expertise in financial markets. If the investment is redeemed or transferred after 12 months from the date of allocation, there will be no exit load. However, if the investment is redeemed or transferred within 12 months, there will be no exit load on the first 10% of the investment and a 1% exit load on the outstanding investment.
Should you invest?
Returns from rules-based strategies are mostly influenced by disclosure to equity risk variables, particularly price, volatility, quality, and numerous others. Rules-based approaches are particularly appealing to investors who have price limitations, an intolerance to huge risk in concentrated portfolios, or a wish to minimise market vulnerability over the long term with low-volatility assets. A concentrated portfolio includes a few different assets to achieve a certain degree of diversity. A concentrated portfolio may raise your risk, but it also increases your return. On the other side, a fund house uses an NFO to generate funds from the investors in order to acquire market instruments such as equity shares, bonds, and so on. NFOs, like stock market IPOs, are meant to raise funds for the instrument or scheme to engage new and more investors. Historically, NFO investors have seen considerable raise upon listing because investors can purchase these funds at the fund's existing net asset value (NAV) after the expiry of the NFO period. A new mutual fund or new fund offer may undoubtedly allow you to diversify your portfolio, but on the other hand, an NFO has no past history of performance or loss, which is a significant risk. So, before investing in an NFO, we recommend that investors should look at the AMC's track record, the purchase price, and the fund's terms and conditions.