After HDFC, Axis Mutual Fund is the latest fund house to launch a children’s gift fund.
Axis MF announced the launch of its open-end balanced fund called Axis Children’s Gift Fund which will invest in a mix of equity, arbitrage and debt. The fund will invest in equity and equity derivatives (40% to 60%), debt (25% to 55%) and cash future arbitrage (5% to 15%).
Speaking at the launch, Chandresh Nigam, MD & CEO, Axis MF said, “We conducted a survey to understand the investment priority of parents in India. Children’s education emerged as one of the top goals of parents. Interestingly, to fulfil this goal, many respondents relied on saving accounts and FDs. This fund will help parents fulfil the education goals of children.”
“The equity allocation will be managed actively, with investment in stocks across the market capitalisation spectrum. The focus would be to build a diversified portfolio of strong growth companies, utilising a bottom-up stock selection process, focusing on appreciation potential of individual stocks from a fundamental perspective,” said Pankaj Murarka, Head – Equities, Axis Mutual Fund in the press release.
Investments can be made only in the name of a minor by parents or legal guardians. The fund also allows ‘donors’, who include grandparents or any close relatives to gift this fund to minors without any cap on the investment limit.
The fund will have two plans, direct and regular with each offering compulsory lock-in and no-lock in period. In case of compulsory lock-in, the investments will be locked-in till the unit holder attains 18 years of age or after 3 years, whichever is earlier.
Under no lock-in option, investments can be redeemed subject to exit load of 3% if units are redeemed/switched out before 1 year, 2% before 2 years, 1% before 3 years and nil after 3 years.
The fund will be benchmarked against Crisil Composite Bond Fund Index and will be managed by Pankaj Murarka (equity) and Kedar Karnik (debt).
The NFO opens on November 18 and closes on December 2. The scheme would re-open for ongoing subscription from December 14.
L&T MF too is planning to launch a children’s fund soon.