Axis Income Plus Arbitrage Passive FOF NFO Opens on October 28, 2025 for Subscription

The Axis Income Plus Arbitrage Passive FOF, Axis Income Plus Arbitrage Passive FOF-Direct (G), is an open-ended fund-of-funds scheme designed to generate optimal returns over the medium term. This fund primarily invests in passive debt-oriented mutual fund schemes and arbitrage funds, providing investors with a low-risk, tax-efficient investment avenue. The underlying portfolio focuses on AAA-rated and sovereign securities, along with short- to medium-duration debt schemes, to offer predictable returns. The arbitrage component helps reduce volatility while maintaining liquidity. Suitable for retail, corporate, and high-net-worth investors, the NFO aims to deliver stable returns through a disciplined, passive investment strategy that replicates index-based performance.

Key Features of Axis Income Plus Arbitrage Passive FOF

• Opening Date: October 28, 2025
• Closing Date: November 11, 2025
• Exit Load: Nil
• Minimum Investment Amount: ₹100, Minimum SIP Amount: ₹100

Objective of Axis Income Plus Arbitrage Passive FOF

The objective of the Axis Income Plus Arbitrage Passive FOF-Direct (G) is to generate optimal returns over the medium term by investing in passive debt-oriented mutual fund schemes and arbitrage funds. The scheme seeks to provide predictable returns with low credit risk and high liquidity while offering a tax-efficient alternative to traditional fixed-income investments.

Investment Strategy of Axis Income Plus Arbitrage Passive FOF

• Invest 50–65% in short- to medium-duration passive debt-oriented mutual fund schemes.
• Allocate 35–50% in arbitrage funds to manage equity exposure risk.
• Maintain 0–5% in money market instruments to ensure liquidity.
• Replicate the underlying index to provide transparency and predictable returns.
• Focus on AAA-rated and sovereign securities for risk minimisation.
• Employ a rolldown strategy on debt instruments to capture accrual benefits in a declining interest rate environment.

Risks Associated with Axis Income Plus Arbitrage Passive FOF

• Performance depends on the underlying passive debt and arbitrage schemes.
• Debt instruments face interest rate, reinvestment, and credit risks.
• Arbitrage funds are exposed to reduced mispricing opportunities and basis risk.
• Portfolio rebalancing may incur transaction costs.
• Market volatility could affect returns from both debt and arbitrage segments.
• Investments in money market instruments may be impacted by liquidity constraints or settlement delays.
• Changes in fiscal, monetary, or regulatory policies could affect the scheme’s risk-adjusted returns.

Risk Mitigation Strategy by Axis Income Plus Arbitrage Passive FOF

The Axis Income Plus Arbitrage Passive FOF-Direct (G) mitigates risks through strict adherence to a passive index-based investment approach, focusing on AAA-rated and sovereign securities. The fund manager ensures diversification across debt and arbitrage schemes to minimise credit risk. The portfolio uses a rolldown strategy for predictable accruals, while the arbitrage component reduces equity market volatility. Liquidity is maintained via money market instruments, allowing redemption payouts on T+2 basis. Tax efficiency is enhanced by holding underlying schemes and avoiding frequent switches, while the fund remains compliant with SEBI and AMFI regulations.

What Type of Investor Should Invest in Axis Income Plus Arbitrage Passive FOF?

• Investors seeking medium-term capital growth with low credit risk exposure.
• Individuals looking for predictable and transparent returns via passive investment.
• Those seeking a tax-efficient alternative to traditional fixed-income avenues.
• Investors prefer minimal volatility with high liquidity and AAA-rated securities.

Where Will the Axis Income Plus Arbitrage Passive FOF Invest?

• Passive debt-oriented mutual fund schemes with 50–65% allocation.
• Arbitrage funds comprise 35–50% of the portfolio.
• Money market instruments 0–5% for liquidity management.
• AAA-rated and sovereign debt securities to minimise credit risk.
• Short- to medium-duration target maturity debt schemes to capture accrual benefits.
• Index-replicating instruments to maintain transparency and predictable returns.