Axis Mutual Fund’s Axis Nifty EV & New Age Automotive Index Fund is open for subscription, with the new fund offer (NFO) scheduled to close on October 30, 2026.
The scheme gives investors exposure to companies across the electric mobility and automotive technology value chain.
The open-ended passive equity scheme tracks the Nifty EV & New Age Automotive Total Returns Index (TRI).
Investors can apply with a minimum investment of Rs 100, with additional investments in multiples of Rs 1.
The fund comes as electric mobility gains ground in India. According to data cited in the fund house’s release, electric vehicle (EV) penetration increased from less than 1 per cent in 2020-21 to 9.4 per cent in 2025-26. However, investors should assess the risks of investing in a single theme rather than treating the industry’s growth as a guarantee of investment returns.
What will the fund invest in?
The fund aims to replicate the underlying index by investing in its constituent companies, subject to tracking error. It offers exposure to businesses involved in different stages of the automotive and electric mobility ecosystem.
These include:
• Vehicle manufacturers: Companies involved in producing electric vehicles and other eligible vehicles covered by the index methodology.
• Battery manufacturers: Businesses engaged in battery production, an important part of the electric mobility supply chain.
• Automotive component makers: Companies supplying parts and systems to the automotive industry.
• Raw material suppliers: Businesses providing materials used in vehicle and battery manufacturing.
• Automotive technology companies: Firms involved in advanced technologies used in the automotive sector.
• Eligible companies under specified government schemes: Businesses that meet the index’s prescribed criteria.
The index selects eligible companies from the Nifty 500 universe after applying liquidity and other eligibility requirements. It is reconstituted and rebalanced twice a year, in March and September.
As of September 30, 2026, largecap companies accounted for 44 per cent of the index, while midcap and smallcap companies represented 29 per cent and 27 per cent, respectively.
This composition means the fund will not be limited to established large companies. Its exposure to midcap and smallcap stocks could increase volatility, particularly during periods of market weakness.
How does the index fund work?
Unlike an actively managed equity fund, where the fund manager selects stocks with the aim of outperforming a benchmark, an index fund follows a predefined index.
The Axis scheme will seek to generate returns before expenses that correspond to the performance of the Nifty EV & New Age Automotive TRI, subject to tracking error. The TRI accounts for dividends as well as changes in stock prices.
The fund’s portfolio will broadly reflect the index’s constituents and their weightings. Consequently, its performance will depend on the underlying stocks rather than on the fund manager’s ability to identify and select winning companies.
Nandik Malik and Rohit Gautam will manage the scheme.
The fund house has announced an exit load of 0.25 per cent for units redeemed or switched out within 15 days of allotment. No exit load will apply after that period.
What should investors consider before applying?
The expansion of electric mobility could create opportunities for vehicle makers, battery manufacturers, component suppliers and technology companies. However, investing in this theme involves risks that extend beyond the pace of EV adoption.
Industry growth does not guarantee stock market returns. Even if electric vehicle sales increase, companies supplying the industry may not necessarily deliver strong profits or attractive share-price returns. Valuations, competition, production costs and execution will also influence their performance.
The fund is concentrated in one investment theme. Unlike a diversified equity fund that spreads investments across sectors, this scheme focuses on companies linked to EVs and new-age automotive technologies. A slowdown in vehicle demand, regulatory changes, supply-chain disruptions or weaker corporate earnings could affect several index constituents simultaneously.
Midcap and smallcap exposure can increase volatility. With 56 per cent of the index allocated to midcap and smallcap companies as of September 30, 2026, investors should be prepared for potentially sharper price movements.
Passive investing does not eliminate market risk. Although the fund follows an index rather than relying on active stock selection, its value will fluctuate with the underlying shares. Tracking error may also cause its returns to differ from those of the benchmark.
The fund house positions the scheme as an option for investors seeking long-term exposure to the changing automotive industry. However, investors should consider their investment horizon, risk appetite and existing equity holdings before committing money.
A thematic fund is generally better assessed as part of a diversified portfolio than as a substitute for broad-based equity investments. Investors should also read the scheme information document to understand the fund’s investment strategy, costs and risks before investing.
The fund house has not guaranteed returns, and the scheme’s investment objective may not be achieved.