Axis Nifty500 Quality 50 Index Fund NFO Opens on August 21, 2025: A Low-Cost Gateway to Quality Equity Investing

The NFO is an open-ended equity index fund designed to mirror the performance of the Nifty500 Quality 50 TRI. It adopts a passive investment approach, investing primarily in companies that are part of the benchmark index. With a minimum investment requirement of only ₹100, it offers easy entry for retail investors.

The fund aims to deliver returns that closely match its benchmark before expenses, though there is no guarantee of achieving this objective. Managed by Axis Mutual Fund, the NFO provides exposure to quality companies across market capitalisations and is suitable for investors seeking long-term wealth creation through index-based investing.

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Key Features of Axis Nifty500 Quality 50 Index Fund

• Opening Date: August 21, 2025
• Closing Date: September 04, 2025
• Exit Load: 0.25% if redeemed/switched within 15 days; Nil after 15 days
• Minimum Investment Amount: ₹100 and in multiples of Re. 1 thereafter

Objectives of Axis Nifty500 Quality 50 Index Fund

The Axis Nifty500 Quality 50 Index Fund - Direct (G) seeks to generate returns before expenses that are in line with the Nifty500 Quality 50 TRI, subject to tracking error. It does not aim to outperform the index but to replicate its performance as closely as possible, offering investors exposure to quality companies within the broader Nifty 500 universe.

Investment Strategy of Axis Nifty500 Quality 50 Index Fund

• The scheme follows a passive strategy, investing in the same securities and proportions as the Nifty500 Quality 50 Index.
• Investments are aligned with the benchmark index, aiming to minimise tracking error.
• The fund may also allocate a small portion to debt and money market instruments to manage liquidity and expenses.
• Derivatives may be used selectively for portfolio rebalancing, hedging, or efficient management within regulatory limits.
• The strategy ensures broad diversification and mirrors index movements rather than relying on active stock selection.

Risks Associated with Axis Nifty500 Quality 50 Index Fund

• Market Risk: Equity markets are volatile and subject to daily price fluctuations that may impact returns.
• Tracking Error Risk: Differences between index performance and scheme returns can arise due to cash holdings, expenses, or index changes.
• Liquidity Risk: Some mid or small-cap stocks in the index may face lower trading volumes, affecting timely purchase or sale.
• Derivative Risk: Use of futures and options may expose the fund to pricing errors, liquidity issues, or imperfect hedging.
• Systematic Risks: Broader economic, political, or global factors can influence the value of the underlying securities.

Risk Mitigation Strategy by Axis Nifty500 Quality 50 Index Fund

The NFO is designed to minimise risk by closely tracking the Nifty500 Quality 50 Index and maintaining alignment with its constituents. To reduce market and liquidity risks, the fund invests in quality companies and maintains a balanced asset-liability profile. Tracking error is continuously monitored, with adjustments made to replicate the index as precisely as possible. Derivatives are used only within regulatory limits and primarily for hedging or portfolio efficiency. Additionally, robust internal risk control systems, portfolio monitoring tools, and compliance frameworks help ensure that risks remain within acceptable thresholds.

What Type of Investor Should Invest in Axis Nifty500 Quality 50 Index Fund?

• Investors seeking long-term wealth creation through equity markets.
• Those who prefer a low-cost, passive strategy rather than active fund management.
• Individuals looking for broad diversification across multiple sectors and company sizes.
• Investors are comfortable with short-term volatility but aiming for steady, index-linked growth over time.

Where Will the Axis Nifty500 Quality 50 Index Fund Invest?

• In equities and equity-related instruments that form part of the Nifty500 Quality 50 Index.
• In the same proportion as the benchmark to replicate index performance.
• Small allocations to debt and money market instruments for liquidity and expense management.
• Permissible use of exchange-traded derivatives for hedging or efficient portfolio management.