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NEW DELHI: Axis Mutual Fund has launched an open-ended scheme that will track the Nifty 50 Index total return index and allow investors to passively participate in the large-cap universe.

The new fund offer (NFO) for Axis Nifty 50 Index Fund will open for subscription on 15 November and close on 29 November, as per the asset management company (AMC).

The fund’s passive strategy seeks to replicate the Nifty 50 Index by investing in a basket of Nifty 50 Index stocks across 13 categories in the same proportion as their weightages in the index.

The Nifty 50 Index represents 50 companies selected from Nifty 50 universe, based on free-float market capitalisation. As per the fund house, through the single index, investors can benefit from diversification and quality investments in large-cap blue-chip companies.

Commenting on the launch, Chandresh Nigam, managing director and chief executive officer, Axis AMC, said, “Axis AMC has believed in offering quality products to investors that suits their risk appetite and needs. Not only do we aim to build a robust product portfolio but hope to deliver consistent performance in every fund that we manage. Axis Nifty 50 Fund’s low friction investment strategy that relies on broader market wisdom coupled with the principle of ‘quality & growth’ philosophy will yield wealth creation opportunities for investors."

The Axis Nifty 50 Index Fund will be managed by Jinesh Gopani, head-equity. The minimum application amount is 5,000 and investors can invest in multiples of Re 1, thereafter.

Passively managed index funds have started gaining significance among domestic investors due to the potential of benchmark returns. In addition to lower expense ratios and the lower tracking error, index funds provide the benefit of complete transparency of the portfolio composition.

As they replicate the index and do not carry out any security selection, passive funds provide more predictability in terms of their performance in different phases of the market.

The fund house has an Axis Nifty Exchange-traded fund (ETF) with assets worth 56 crore as of 30 September. The ETF, launched in July 2017, has delivered a return of around 46% on a one-year basis.

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