Axis Mutual Fund announced the launch of the Axis US Treasury Dynamic Bond ETF Fund of Fund, an open-ended fund of funds investing in ETFs wherein the underlying investments comprise US treasury securities across duration.
The scheme opened for public subscription on December 05, 2023, and will close on December 11, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
What kind of mutual fund scheme is this?
This is an open-ended fund of funds investing in ETFs wherein the underlying investments comprise US treasury securities across duration.
This product is suitable for investors seeking
- Regular income over the long term
- Investment in overseas ETFs wherein the underlying investment comprises US treasury securities across the duration.
What is the main objective of investing in this fund?
The main goal of the scheme is to generate consistent income through the investment in units of international ETFs with a mandate to invest in US treasury securities across different durations. It’s important to note that there is no guarantee that the scheme will achieve its investment objective.
How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹500 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments |
Indicative allocations (% of total assets) |
Risk Profile | |
|
Minimum |
Maximum |
||
|
Units of overseas ETFs wherein the underlying investments comprise of US treasury securities |
95% |
100% |
Very High |
|
Debt and Money market instruments |
0% |
5% |
Low to Moderate |
Are there similar mutual funds in the market?
To date, no asset management company (AMC) has launched any such scheme in the country.
How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against Bloomberg US Intermediate Treasury TRI. The underlying schemes shall invest in treasury bonds with maturity based on the duration view. The Bloomberg US Intermediate Treasury measures the performance of US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury with a maturity of 1-10 years. Hence, to evaluate the performance of the schemes the benchmark is appropriate.
Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as
– If redeemed/switched out within one month from the date of allotment: 0.5%
– If redeemed/switched out after one month from the date of allotment: Nil
Who will manage this scheme?
Vinayak Jayanath has been designed as the fund manager of this scheme.
Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
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Updated: 05 Dec 2023, 04:40 PM IST