Axis Global Equity Alpha Fund of Fund – New Fund Offer

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Last week, Axis AMC launched the Axis Global Equity Alpha Fund of Fund that provides an opportunity to invest in the global equity market. Axis AMC has launched this scheme in partnership with Schroders which is an international asset management company that manages operations in more than 37 locations including Europe, Africa, America, India, and the Middle East with an AUM of  £525.8 billion.

What is the Axis Global Equity Alpha Fund of Fund?

Indian investor’s funds that are invested into another fund which is located outside India is called a global fund. The Axis Global Equity Alpha Fund of Fund’s corpus will be invested into Schroder International Selection Fund Global Equity Alpha, thus giving Indian investors an opportunity to invest in global top-rated companies. This is an open-ended Fund of Fund scheme.

The NFO details are as below.

  • The scheme would open for subscription on 4th September 2020.
  • The scheme would close for subscription on 18th September 2020.
  • This is an open-ended scheme so will reopen after 5 days from the closure date.
  • Minimum investment of ₹. 5000 and in multiples of ₹ 1 thereafter.
  • Both growth and dividend options are available.
  • The scheme is available for both regular and direct plans.
  • You can start a SIP for ₹ 1000 per month for a minimum of 6 months.
  • The NAV starts at ₹ 10 for initial subscriptions.
  • There is no entry load for this scheme.
  • There is an exit load of 1% if you withdraw more than 10% of the fund’s unit within 1 year.
  • The scheme’s Total Expense Ratio (TER) would be around 2.25% at the max.

Benefits of investing in Axis Global Equity Alpha Fund of Fund

  • Unlock the global opportunities not available in Indian markets
  • Be a part in the sunrise sector and global themes
  • Better risk-adjusted returns through global diversification
  • Leverage Axis AMC’s domestic research & Schroders’ global expertise
  • Invest globally through domestic funds with a minimum application of Rs. 5000 and multiples of Rs.1 thereafter
  • Ideal wealth creation strategy for the long term

Eligibility Criteria for this NFO

  1. Investors must be an Indian resident adult.
  2. Minors can invest through parents or lawful guardians.
  3. A partnership firm can invest through any of its partner’s names.
  4. A proprietorship firm can invest through its owner/proprietor.
  5. Companies, societies, and banks can invest.

Why You Should Invest in Axis Global Equity Alpha Fund of Fund

India accounts for 3% of the global market share. So if you are investing in only Indian companies, you are missing out on the rest of the 97% of the global market. Moreover, investing in global funds will give you access to the world’s top companies like Amazon, Facebook, Visa, Apple, and Google.

Global investing also gives you the benefit of currency diversification. Sometimes, investors have to deal with multiple uncertainties in the home country- these could be political or economic or social in nature. So if you have invested only in your home country, all these factors will have a direct impact on the return on your investment. Global diversification allows you to mitigate that risk while simultaneously reducing the chances of loss. 

Axis Global Equity Alpha Fund of Fund is a diversified global fund that is not a single country feeder fund. A diversified global fund helps you to lower down your risk.

FAQs of the NFO Scheme

What is a Fund of Funds (FoF)?

A fund of funds is an open-ended fund that invests the majority of its assets in another mutual fund or pooled investment vehicle as per the mandate of the scheme. The Axis Global Equity Alpha FoF will invest in the Schroders International Selection Fund (SISF) Global Equity Alpha domiciled in Luxemburg.

Who is Schroders?

Schroders is a leading global asset manager with assets of over £526 billion under management across asset classes. They operate in 37 countries and are uniquely placed in managing global assets given their reach and expertise in asset management. With over 200 years of market expertise, the proposed offering which gives Indian investors a unique offering to diversify their portfolios through global equities with a market veteran trusted the world over. Schroders is also part of the JV that owns Axis Asset Management Company Limited.

How does SISF Global Equity Alpha Fund allocate its assets?

From a philosophy standpoint, the fund seeks to exploit 3 persistent inefficiencies
• Markets fail to look far enough ahead when appraising the earnings power of companies
• Markets extrapolate historic growth and fail to correctly interpret catalysts that change the trajectory of growth 
• Markets over-react to short term news flow
The SISF fund follows a disciplined investment strategy & endeavors to deliver consistent outperformance over time

What is the investment objective of this scheme?

The main objective of the scheme is to provide long term capital growth by investing in the Schroder International Selection Fund Global Equity Alpha fund. Most of the corpus (95%) will be invested into the equity and rest 5% will be into the debt or money market.

Who is the Fund Manager of Axis Global Equity Alpha Fund of Fund?

Mr. Hitesh Das – Foreign Securities
Mr. R. Sivakumar – Debt portion

Can the SISF Global Equity Alpha invest in Emerging Markets & China?

The unconstrained nature of the fund allows for the fund to invest across borders to identify the best ideas. Unlike a structure that is country-specific, a global strategy can switch seamlessly across countries and opportunities with an endeavor to benefit from changing global dynamics.
Different markets perform at different times. The illustration below explains the need for a global investment focus

What is the allocation pattern in this scheme?

It invests 95% to 100% of investment in Units / shares of Schroder International Selection Fund Global Equity Alpha. The risk profile in this segment is medium to high.
2) It would invest 0% to 5% in debt, money market instruments and / or units of liquid schemes. The risk profile in this segment is low to medium.

What is Schroders’s Global research capability?

1. It has over 400 fund managers and analysts worldwide
2. Over 100 equity analysts and 25 credit analysts worldwide
3. Over 200 years of experience of investment in markets

What is the performance of the underlying fund?

Since this fund will invest in the existing global fund, let’s have a look at the performance.

Axis-Global-Equity-Alpha-FoF-Performance-of-SISF-Global-Equity-Alpha

What is the minimum investment amount for this fund?

The minimum investment amount is ₹ 5000

Will there be an impact of currency on my investments in this fund?

Yes. Since the underlying fund will invest internationally, the investments will reflect the impact of currency variations. The fund will invest in a USD share class specially tailored for the Indian investor. The economics of currency markets tend to result in a devaluation of the INR over long periods of time. By investing internationally, your investments may gain by virtue of a relative weakening of the INR.

What are the investment strategies?

The investment objective of the Scheme is to provide long term capital appreciation by predominantly investing in Schroder International Selection Fund Global Equity Alpha, a fund that aims to provide capital growth by investing in equity and equity-related securities of companies worldwide. The Scheme may also invest a part of its corpus in debt, money market instruments, and/or units of liquid schemes in order to meet liquidity requirements from time to time.

How the scheme will be managed?

The Scheme will be passively managed fund investing predominantly in unit/shares of Schroder International Selection Fund Global Equity Alpha. The investment made in the Schroder International Selection Fund Global Equity Alpha will be based on the subscriptions and redemptions received in the Scheme and within the overall limits specified by SEBI/RBI.

How will the scheme benchmark its performance?

MSCI World (Net TR)
The performance will be measured in INR terms.

What is the procedure of Subscription and Redemption?

All subscription and redemption requests for which NAV of the day of a credit event or subsequent day is applicable will be processed as under:
i. Upon trustees’ approval to create a segregated portfolio –
 Investors redeeming their units will get redemption proceeds based on the NAV of the main portfolio and will continue to hold the units of the segregated portfolios.
 Investors subscribing to the Scheme will be allotted units only in the main portfolio based on its NAV.
ii. In case trustees do not approve the proposal of a segregated portfolio, subscription and redemption applications will be processed based on the NAV of the total portfolio.

Who cannot invest in the scheme?

Any individual who is a foreign national or any other entity that is not
an Indian resident under the Foreign Exchange Management Act,
1999 (FEMA Act) except where registered with SEBI otherwise explicitly permitted under FEMA Act/ by RBI/ by any other applicable authority.
Pursuant to RBI A.P. (DIR Series) circular no. 14 dated September 16,
2003, Overseas Corporate Bodies (OCBs) cannot invest in Mutual
Funds.
NRIs residing in Non-Compliant Countries and Territories (NCCTs) as
determined by the Financial Action Task Force (FATF), from time to
time.
U.S. Persons and Residents of Canada as defined under the applicable
laws of U.S. and Canada except the following:
a) subscriptions received by way of lump sum / switches / systematic
transactions received from Non-resident Indians (NRIs) /Persons of
Indian origin (PIO) who at the time of such investment, are present
in India and
b) FPIs
These investors need to submit a physical transaction request along
with such documents as may be prescribed by Axis Asset
Management Company Ltd. (‘AMC’)/Axis Mutual Fund Trustee Ltd.
(‘the Trustee’)/Axis Mutual Fund (‘the Fund’) from time to time.
The AMC reserves the right to put the transaction requests on
hold/reject the transaction request/reverse allotted units, as the
case may be, as and when identified by the AMC, which are not in
compliance with the terms and conditions notified in this regard.
Axis Mutual Fund Trustee Ltd./ the AMC reserve the right to
change/ modify the above provisions at a later date.
Such other persons as may be specified by AMC from time to time.

Can I invest through SIP?

Unitholder can enroll for the SIP facility by submitting duly completed
Enrolment Form at the Official Point(s) of Acceptance. An Investor shall have the option of choosing any date of the Month as his SIP date other than the 29th, 30th, or 31st of a month. The minimum amount and minimum installments for monthly and yearly frequency under SIP Facility is as follows:

Monthly 6 Installments Rs. 1,000/- and in multiple of Re. 1/-
Yearly 3 Installments Rs. 12,000/- and in multiple of Re.
1/-
If the SIP period is not specified by the unitholder then the SIP enrolment will be deemed to be for perpetuity and processed accordingly.

What are the taxation aspects of the fund?

For the purpose of taxation, the fund is categorized as an ‘other than equity oriented mutual fund.

The aforementioned tax rates shall be increased by applicable surcharge and health and education cess. *Assuming the investor falls into the highest tax bracket. In view of the individual nature of tax consequences, each Investor / Unitholder is advised to consult his / her own professional tax advisor.

What are the additional modes to transact (subscribe/redeem / switch) in the scheme?

Investors can transact through the below modes:
a.     Axis MF Online / Axis MF Mobile
b.     MF Utility
c.      Channel Distributors
d.     Stock Exchange
e.     Other Electronic Mode
Alternatively, investors may apply through the ASBA (Application Supported by Blocked Amount) process during the NFO period of the Scheme by filling in the ASBA form and submitting the same to their respective banks, which in turn will block the amount in the account as per the authority contained in ASBA form, and undertake other tasks as per the procedure specified therein. For complete details on the ASBA process and on all the above modes of transactions refer to the scheme related documents made available on our website www.axismf.com.

What will be the expense ratio of the fund?

The AMC has estimated that up to 2.25% of the daily net assets of the Scheme will be charged to the Scheme as expenses. This will include expenses of the underlying scheme as well. For the actual plan wise current expenses being charged, investors should refer to the website of the AMC.

What is Schroder International Selection Fund Global Equity Alpha?

The Fund invests at least two-thirds of its assets in equity and equity-related securities of companies worldwide.‘Alpha’ funds invest in companies in which the manager has a high conviction that the current share price does not reflect the future prospects for that business. As the Fund is index unconstrained it is managed without reference to an index. The manager seeks to identify companies which he believes will deliver future earnings growth above the level expected by the market typically on a 3-5-year horizon (we term this as ‘a positive growth gap’). The Fund is managed with reference to material environmental, social, and governance factors. This means issues such as climate change, environmental performance, labor standards, or board composition that could impact a company’s value may be considered in the assessment of companies. The performance of Schroder International Selection Fund Global Equity Alpha is given below:

Axis-Global-Equity-Alpha-FoF-Performance-of-SISF-Global-Equity-Alpha
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