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Home >> Blog >> Axis CRISIL - IBX AAA NBFC Index - Jun 2027 Fund NFO: NAV

Axis CRISIL - IBX AAA NBFC Index - Jun 2027 Fund NFO: NAV

  


Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund: Complete Overview

Axis Mutual Fund launches India's first NBFC sector-based target maturity mutual fund i.e. Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund under its AMC Axis Asset Management Company Ltd. 

This is an open-ended Target Maturity Index Fund, designed to invest in the CRISIL-IBX AAA NBFC Index constituents, maturing in June 2027. Both credit risk and interest rate risk are low for the fund. The primary objective of the fund is to provide investment returns that closely mirror the CRISIL-IBX AAA NBFC Index-June 2027.

The new fund offer will expire on September 23, 2024, however, subscribers may begin participating in this Axis NFO on September 13, 2024. This mutual fund scheme will be open for ongoing sale and repurchase within 5 business days from the date of allotment. The Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund NFO has a subscription amount of Rs.5000 and in multiples of Rs.1. The plan has a moderate level of risk. It is not assured that the investing objective of the program will be achieved.

MD & CEO of Axis AMC B. Gopkumar said, "This is the first NBFC sector-based target maturity mutual fund scheme in India. It allows investors to participate in a high-quality portfolio with some degree of predictability.”

This NFO Mutual fund will invest 95-100% of its assets in fixed-income instruments replicating CRISIL-IBX AAA NBFC Index-Jun 2027 and 0-5% in Debt and Money Market Instruments.

Let’s see this new NFO offerings below:

What is CRISIL-IBX AAA NBFC Index-Jun 2027?

It is a sectoral/thematic target maturity index that aims to monitor the performance of AAA issuers located solely in the NBFC industry and maturing close to the index's target date.

What are Target Maturity Funds?

  • Target Maturity Funds are passive debt mutual fund schemes that are open-ended and follow an underlying bond index with a predetermined maturity.

  • Together, the portfolio's components share important traits with the underlying index.

  • Individual securities' maturities are shorter than those of the index.

  • The strategy used by these funds is purchase and hold. Coupons are reinvested, which delays taxes and increases the compounding advantage.

  • Plans have automatic redemption of units at the applicable NAV on the maturity date.

  • Minimal risk of interest rates beyond the specified maturity.

About the Fund-Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund

  • India’s first debt mutual fund scheme focused on the NBFC sector.

  • Average maturity of around 2.68 years 

  • Asset quality of 100% AAA

  • Higher carry compared to active loan funds with comparable durations and rating profiles without weakening the credit profile

 

Fund Strategy

Investment Philosophy: 'Buy and Hold' approach with a target maturity, subject to semi-annual index rebalancing.

Asset Quality of 100% allocation to AAA-rated NBFC issuers.

Issuer Limit: 15% (Single issuer)

Risk of Interest Rates: As the scheme gets closer to maturity, the duration of the securities will get shorter, minimizing the duration of risk during the product's lifetime.

Investors will receive their investment money returned along with any potential gains when the program matures in June 2027.

 

How does the Sectoral Target Maturity Fund differ from other Debt Funds?

  • Sector constraints and portfolio liquidity norms lead to a drag on the YTM of active debt funds

  • Conventional target maturity funds invest primarily in G-Secs, SDLs, and AAA PSU bonds and have sector limitations, which limits their premium exposure carry assets.

 

Why consider investing in a 3-year NBFC Target Maturity Fund?

1. Over the past five years, the NBFC environment has changed- 

The GNPA (Gross Non- Non-Performing Assets) fell to 4% in 2024 from 43.90% in 2019, and NNPA (Net Non- Non-Performing Assets) decreased from 3.7% in 2019 to 1.1% in 2024.

2. Both capitalization and leverage levels have increased.

Capital Adequacy has increased from 19.30% in 2019 to 26.6% in 2024 and leverage levels have reduced to 2.2% in 2024 from 3.4% in 2019.

3. Increased profitability helps create a safety net for the future.

Return on Assets (ROA) has increased to 3.3% in 2024 from 1.7% in 2019.

4. The funding mix has greatly improved, requiring fewer short-term loans.

Total interest-bearing liabilities have been reduced to 2.6% in 2024 from 7.6% in 2019.

 

Who should invest in this fund?

The product is suitable for investors who are seeking:

  • Revenue over the intended maturity timeframe

  • A non-closed desired level of maturity index investment fund CRISIL-IBX-AAA NBFC tracking Index for June 2027 according to tracking error.

 

Scheme Plan: This new mutual fund scheme is available in two options:

Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund-Direct 

Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund-Regular

Each Plan offers-

a) Growth Option

b) Income Distribution cum Capital Withdrawal (IDCW).

 

Axis Mutual Fund Details

  • The Assets Under Management (AUM) for Axis Mutual Funds schemes as of March 31, 2024, were stated by the Axis AMC to be Rs.2.74 lac crores.

  • The market share of Axis MF’s AUM was 4.9% of the total AUM Mutual Fund Industry as of 31 March 2024.

  • It operates in 19 countries in the Middle East, Europe, America, and Asia with 31 investment teams. Axis Mutual Fund offers more than 53 distinct schemes in its product lineup. It has more than 98 lac active investor accounts and is present in more than 100 cities.

 

Click Here To Stay Updated With The Latest NFOs.

Fund Overview

Start Date

13 September 2024

End Date

23 September 2024

Allotment Date/Subscription Date/Re-open Date

The scheme reopens within 5 business days after the closure of the NFO, for continuous sale and repurchase.

VRO Rating

-

Expense Ratio

Nil

Exit Load

Nil

AUM 

Rs.2.74 lac crore.

Lock-in

NA

Stamp Duty

0.005% (From July 1st 2020)

Benchmark(s)

CRISIL-IBX AAA NBFC Index-Jun 2027

Min. Investment

Rs.5000 and in multiples of Rs.1.

Risk

Moderate Risk

Short-Term Capital Gains (STCG)

For less than 2 years, as per Tax Slab.

Long-Term Capital Gains (LTCG)

For more than 2 years, a 12.50% Tax is applicable.

 

How To Invest In The Scheme After The Closure of The NFO?

If you have missed participating in the NFO and now want to invest in the same Scheme on a continuous basis, then within 5 business days after the closure of the NFO, when the Scheme will reopen; you will have the option to participate and invest directly in the Mutual Fund by spending at NAV based price by logging on to your Demat account and search for “Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund” or directly with the AMC or simply click the ‘Banner’ below.

 

The Objective of The Fund

To deliver investment returns, excluding fees and expenses, that, subject to tracking errors, nearly match the total returns of the securities as indicated by the CRISIL-IBX AAA NBFC Index-June 2027. However, there can be no assurance or guarantee that the scheme's investment goals will be met.

Asset Allocation (% of Total Assets) of the Scheme's portfolio will be as follows:

Types of Instruments

Minimum Allocation (% of Total Assets)

Maximum Allocation (% of Total Assets)

Fixed-income instruments replicating CRISIL-IBX AAA NBFC Index-Jun 2027

95

100

Debt and Money Market Instruments.

0

5

 

Peers of Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund

 Since the Scheme is first in its category no exact peers are available.

Since this scheme is a new scheme, hence no comparable data on its past performance against its peers is available.

 

Risk Factors In Such Funds

  • The plan will be passively managed and offer exposure to the components of the CRISIL-IBX AAA NBFC Index through June 2027. It will also regularly monitor the index's performance and yield before expenses. The shifts in the Indian markets in terms of the scheme's underlying index could impact its performance.

  • Risks involved due to tracking error differences.

  • The returns of the scheme could differ from the underlying index.

  • Risks associated with re-investment, liquidity, credit, etc.

 

Past Performance of Target Maturity Index Funds

Scheme

1Y Return

AUM (Rs.) / Fund Size (Rs.)

ABSL CRISIL IBX SDL Jun 2032 Index Fund

8.77%

142.51 Cr.

ABSL CRISIL IBX 60-40 SDL Plus AAA PSU-Apr 2026 Index Fund

7.35%

51.36 Cr.

 

Axis CRISIL-IBX AAA NBFC Index-Jun 2027 Fund-Growth Fund Managers:

  • Mr. Aditya Pagaria.

Conclusion

The fund has a profile that is moderate in risk. The Scheme provides a pre-defined maturity period. Your investing horizon and risk tolerance should be taken into account. The sector in which the Scheme will invest has seen growth and positivity in recent years. However, returns can not be guaranteed.



Frequently Asked Questions

+

In June 2000, the CRISIL Mutual Fund Ranking- also known as CMFR-was introduced. It assesses the risk and performance of several Indian mutual fund schemes across a range of asset types, including debt, equity, and hybrid.

+

13 September 2024 to 23 September 2024.

+

Applying for the NFO is just one click away. You can simply click here to buy best mutual fund.

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The minimum investment for the Scheme is Rs.5000 and in multiple of Rs.1 thereafter



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