Index Fund Corner
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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
What will change?
Faster deployment of NFO funds
AMCs will have to deploy funds collected through New Fund Offers (NFOs) within a specified time. If they fail to do so, investors can exit without paying an exit load.
This rule will prevent AMCs from raising excessive funds during NFOs and ensure proper allocation.
SEBI has set a 30-day timeline for Asset Management Companies (AMCs) to deploy funds raised through NFOs.
This is a reduction from the previous 60-day period.
Mandatory stress testing disclosure
Mutual fund schemes will need to disclose stress test results. This will provide investors with better insights into the financial stability of the schemes.
Investment mandate for AMC employees
A portion of AMC employees’ salaries will be invested in mutual fund schemes. The investment amount and choice of schemes will depend on their roles, aligning their interests with investors.
How do these changes benefit investors?
The 30-day deployment rule ensures that investor funds are put to work quickly, reducing the risk of idle capital. If AMCs fail to deploy the funds within the specified period, investors have the option to exit without incurring an exit load.
This offers greater flexibility.
By limiting the amount of money AMCs can raise, SEBI prevents the collection of excess funds that cannot be deployed efficiently.
Investors will also be assured that their money will be invested promptly and at fair valuations.