Axis Global Innovation Fund of Fund NFO: Investing in disruptive global companies
Axis Mutual Fund has announced the launch of their new fund – ‘Axis Global Innovation Fund of Fund’. The fund will provide investors with an opportunity to invest in Schroder International Selection Fund Global Disruption, an equity fund that aims to provide long-term capital growth by investing in companies worldwide that benefit from disruption. The New Fund Offer (NFO) opens for subscription on May 10 and closes May 21.
NFO key features
Launched in Dec-2018, the $350-million SISF is a global equity fund that aims to provide capital growth by investing in companies worldwide that benefit from disruption. It has 90-120 stocks in its portfolio. The stocks are growth in nature, hence have higher price-to-earnings, price/cash flows multiples.
Disruptive growth is an opportunity for investors to capture significant value creation over time.
SISF focuses on a broad set of sub-themes including fin-tech, e-commerce, environmental, healthcare etc. The top stock holdings are Alphabet, Microsoft, Amazon, TSMC, Apple, Visa, Blackrock, Booking Holdings, Texas Instruments and ASML etc. SISF Global Disruption has given a 1-year return of 66.6% and 33.4% since inception.
Axis Global Innovation Fund of Fund offers Indian investors an opportunity to take part in a globally diversified equity portfolio that can complement their Indian equity allocation.
Minimum application (NFO) of Rs 5,000 and in multiples of Re 1 thereafter.
Benchmark: MSCI AC World (Net TR) (INR)
Why international
Exposure to global investment opportunities today is one of the most crucial aspects for investors to broaden their investment universe.
Global investing also allows investors to capture disruptive growth through various themes, many of which are not available on the listed markets in India. Global investing therefore diversifies the investment portfolio for investors and has the potential to improve their risk-adjusted returns.
Fund-house speak
On the launch of the NFO, Chandresh Kumar Nigam, MD & CEO, Axis AMC, said “Thematic products allow investors to participate in important structural themes in a targeted manner. In that context, we are extremely excited to offer investors a product that captures one of the most significant themes of the current age – disruptive innovation precipitated by technological advancements and changes to the business environment. Companies that are bringing about and benefiting from these changes have the potential to generate high growth. The Schroders fund is able to scout for such companies on a global basis, giving us access to the best such ideas from around the world.â€
Exit load
If redeemed / switched-out within 12 months from the date of allotment, for 10% of investment there will be no exit load. For remaining investment there will be 1% load.
If redeemed/switched out after 12 months from the date of allotment, there will be no exit load.
Taxation
Axis Global Innovation Fund of Fund will be treated as a debt fund for taxation. This means resident individuals’ long-term capital gains will be taxed at 20% with indexation and short-term capital gains will be taxed at 30%. Dividends will be taxed in the hands of unitholders at applicable rate under the provisions of the Income-tax Act, 1961 (Act).
Investor takeaways
This is an FoF so Indian investors will bear the recurring expenses of the scheme, besides the expenses of other schemes in which the Fund of Funds scheme makes investment.
The fund appears to be a global technology-led fund given its top holdings. The fund also provides a play on sunrise sectors like electric vehicles, AI, renewables that are not present or are limited in India.
Investors considering investments in this NFO must understand that their principal will be at very high risk.
