Private player Axis Mutual Fund today said it is looking at raising up to Rs 1,000 crore from its recently launched, fixed income, new fund offer (NFO), which will invest mainly in equities and corporate bonds.
The Axis Income Saver Fund is an open-ended scheme that was launched on May 24 and will close on June 21. The NFO price for the scheme is Rs 10 per unit and would open again for further dealings from July 21.
"We are aiming to raise Rs 750-1,000 crore from the NFO, Axis Income Saver Fund. The fund is aimed at capping the downside risk of investors by investing in fixed income products, while participating in the upside of the stock market," Axis AMC MD & CEO Rajiv Anand told PTI.
"Over time, we expect to fund size to grow to Rs 5,000- 6,000 crore," he added.
Anand said the scheme will invest up to 35 per cent in equities and allocate the balance amount in money market and debt instruments. "Typically, we invest in AAA/AA rated corporate bonds," Anand added.
On the indicative profile of potential investors, he said the product was designed for people who have in mind 2-4 year horizon for staying with the fund.
Anand declined to share the return people should expect from the NFO, but said that it would be in line with industry returns on similar products, such as monthly income plans.
He added that the NFO was designed for people who want to avoid the volatility of equity markets but were looking for higher returns than those offered by term deposits, which could translate into the range of 8-10 per cent annually.
He said the product, like others in its class, does not have the principal assured and the fixed income would depend entirely on the dividend available.
The scheme will offer growth and dividend options, with payout or reinvestment facility on a quarterly, half-yearly or annual basis.
