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Axis MF launches Axis Children's Gift Fund, an open-ended balanced scheme

Posted On: 2015-11-17 10:45:30 (Time Zone: IST)

Axis Mutual Fund, one of the premier asset management companies in India, today announced the launch of Axis Children's Gift Fund, an open ended balanced scheme, which would endeavor to generate income by investing in debt & money market instruments along with long-term capital appreciation through investments in equity & equity related instruments*.

Axis Mutual Fund's rationale for launching an altogether fresh investment value proposition in Axis Children's Gift Fund, is to pursue and propagate its unique goal-based disciplined investment approach and present an investment option to try and plan for children's longer term goals such as higher education and marriage.

It is in this context that Axis Children's Gift Fund could be considered as one of the investment options, which aims to focus on long-term investment and endeavours to help in saving for child's needs as he/she grows up. Investments in the fund can be planned for a child's future be it education, marriage or just an investment for a rainy day. The investments, however, can be made only in the name of a minor (<18 yrs at the time of investment), who would be represented by his / her parent or legal guardian, till attaining Majority status. Also, there's a unique provision of 'Donor' which allows Grandparents or any close relative to gift this fund to minor investor without minimum cap on the investment limit.

Speaking at the launch of Axis Children's Gift Fund New Fund Offer (NFO), Mr Chandresh Kumar Nigam, MD & CEO, Axis AMC said: "From Children's perspective, Parents are today saddled with achieving two critical goals - making financial provision for Children's Education and their Marriage. Their dilemma gets compounded owing to the scary global fact that Education Inflation is way above Consumer Price Index (CPI) Inflation. Consequently, the younger the child is, the more expensive education is likely to be going forward, considering that cost of school education, average annual private education expenditure and average rise in IIM / Medical Education fees has only seen dramatic, steep and linear rise of 150% to 250% in the last 5 to 10 years."

"The option of borrowing - availing Education Loan could practically and arithmetically prove financially draining - as the cost of loan EMIs, monthly outgo, at a future date would definitely be exponential and multiple times costlier compared to present day long term commitment of Systematic and disciplined monthly investment. Axis Children's Gift Fund which exactly aspires to try and help achieve the desired financial goal is thus a potential investment solution for the parent fraternity," Mr Nigam said.

Axis Children's Gift Fund will invest in different avenues like Equity and equity derivatives (between a minimum of 40% and maximum of 60%), Debt and Debt derivatives (between Minimum of 25% and maximum of 55%), and cash future arbitrage (between 5% to 15%).

"The equity allocation will be managed actively, with investment in stocks across the market capitalisation spectrum. The focus would be to build a diversified portfolio of strong growth companies, utilising a bottom-up stock selection process, focusing on appreciation potential of individual stocks from a fundamental perspective thus reflecting Axis Mutual Fund House's most attractive investment ideas, at all points of time. The portfolio would be carefully selected to include companies having a robust business models and enjoying sustainable competitive advantages, as compared to their competitors," said Mr Pankaj Murarka, Head Equities, and Fund Manager of the Axis Children's Gift Fund.

The Debt allocation for Axis Children's Gift Fund will be driven by the portfolio duration and credit exposures which would be decided based on a thorough research of the general macroeconomic condition, political and fiscal environment, systematic liquidity, inflationary expectations, corporate performance and other economic considerations. Axis Children's Gift Fund would have the flexibility to invest in the entire range of debt instruments, but has consciously decided to avoid certain category of securitised debt - the scheme would avoid investment in securitised pool comprising of micro-finance and personal loans assets, given the repayment risk, involved, Mr Nigam said.

For Cash-Futures arbitrage strategy, Axis Children's Gift Fund would look for market opportunities between the spot and the futures market and invest only between 5 % and 15% of assets, to provide stability and liquidity.

Axis Children's Gift Fund would have two plans viz. Direct Plan & Regular Plan with each offering two sub plans - Compulsory Lock-in and No Lock-in. Under each sub plan, the scheme would offer Growth and Dividend options. In the Dividend option - there would be Dividend Payout and Reinvestment Facility, with reinvestment option being available under No Lock-in sub plan only.

Entry Load is not applicable under any plans. Even under the sub-plan which offers Compulsory Lock-in of three years, there would be no Exit Load.

In case of compulsory lock-in, investment will be locked-in till the unit-holder (being the beneficiary child) is 18 years of age. Investment may be redeemed after the unit-holder is 18 years of age or 3 years whichever is later. For No Lock-in option, Investment will not be locked-in & can be redeemed at any point of time at NAV based prices subject to exit load (applicable under No-Lock-in option)- an Exit Load of 3% is payable if Units are redeemed / switched-out up to 1 year from the date of allotment, 2% is payable if Units are redeemed / switched-out after 1 year and upto 2 years from the date of allotment, 1% is payable if Units are redeemed / switched-out after 2 years and upto 3 years from the date of allotment and NIL if Units are redeemed / switched-out after 3 years from the date of allotment.

Minimum Amount for Application in the Axis Children's Gift Fund NFO would be INR 5,000 and in multiples of INR 1/- thereafter.

Axis Children's Gift Fund would have an almost equal allocation to equity & fixed income instruments, and hence a customized benchmark, 50% Nifty 50 + 50% Crisil Composite Bond Fund Index, has been created to compare its performance.

Nifty 50, being a well-diversified index accounting for 22 sectors of the economy, is a suitable benchmark for the equity part of the scheme. Crisil Composite Bond Fund Index is an index which tracks the return on a composite portfolio of government securities & AAA/AA rated corporate bonds making it a suitable benchmark for the fixed income portion of the scheme.

The fund will be managed by Mr. Pankaj Murarka (equity) and Mr. Kedar Karnik (debt).Both the fund managers bring with them immense experience in the equity and debt market respectively and strong growth potential for the fund in terms of the investment strategies.

The NFO period for Axis Children's Gift Fund would open on Wednesday, November 18, 2015 and will close on Wednesday, December 2; 2015.The scheme would reopen for ongoing subscription from Monday, December 14, 2015.

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