The fund house has filed four offer documents with SEBI to launch ETFs linked to banking, metal, FMCG and energy
Mumbai: Axis Mutual Fund is keen on entering the growing ETF market. It has filed offer documents with SEBI to launch its Axis Metal ETF, Axis FMCG ETF, Axis Banking ETF and Axis Energy ETF. There are no ETFs linked to Energy, Metal, and FMCG index in the ETF space at present.
Currently, Axis MF has 13 funds in its basket including an ETF, Axis Gold ETF. Based on the feedback from its distributors, the fund house is planning to launch feeder funds which will invest in these underlying ETFs. “These are going to be underlying funds for products that we will launch in the long run. Within our Axis Equity and Mid Cap Funds we have already covered all that is available in that space,” says Karan Datta, National Sales Head, Axis Mutual Fund.
Axis Energy ETF
As per its offer document, the Axis Energy ETF will invest not less than 95% of its corpus in stocks covered by CNX Energy Index. The CNX Energy Index constitutes of stocks like BPCL, Cairn India Ltd, Gail (India) Ltd, NTPC Ltd, RIL, Tata Power, etc. The fund aims to be fully invested in equity at all times. The CNX Energy Index has fallen one percent from April 2010 from 9056 to 8979 as on May 09, 2011. The CNX Energy Index stocks represent 12% of the total market capitalization as on March 31, 2011.
Axis Metal ETF
It will invest 95 percent of its corpus in stocks constituting BSE Metal Index and up to five percent in money market instruments. The BSE Metal Index comprises of 13 stocks like Tata Steel, Hindalco, Jindal Steel & Power, Sesa Goa, JSW Steel. Tata Steel has the highest weight on this index at 22.38 (as on May 09, 2011) per cent.
Axis FMCG ETF
The fund will invest 95 percent of its corpus in CNX FMCG Index consisting of 15 stocks like Britannia, Colgate Palmolive, Dabur and ITC. FMCG funds like Franklin FMCG Fund and ICICI Pru FMCG have delivered 18 per cent and 10 per cent CAGR return respectively during a three year period.
Axis Banking ETF
Currently there are three bank ETFs like Bank BeEs, Kotak PSU Bank ETF and Reliance Banking ETF. Bank BeES launched by Benchmark MF in May 27, 2004 has delivered 44 per cent CAGR return during a two year period. Kotak PSU has delivered 49 per cent during the same time frame while Reliance Banking ETF has posted 44 per cent CAGR return.
Axis Banking ETF will invest in stocks constituting CNX Bank Index. CNX Bank Index represent 14.79 per cent of the free float market capitalization of the stocks traded on NSE as on March 31, 2011.
