Axis Mutual Fund has launched a closed end income fund – Axis hybrid Fund Series 5. The fund will invest in high quality fixed income securities that are maturing on or before the maturity of the scheme and in equity instruments. The new fund offer is currently open for subscription and closes on July 19.
The scheme will invest 70%-95% of assets in debt securities, 0- 25% in money market securities and 5%-30% in equities. The scheme will follow a passive investment strategy for the debt component of the portfolio. In the equities portfolio the fund manager will adopt a bottom-up stock selection process, focusing on appreciation potential of individual stocks from a fundamental perspective. The fund expects the equity exposure to help investors achieve superior risk adjusted returns over the tenure of the fund. The minimum investment amount is Rs 5,000 and in multiples of Rs 10 thereafter. After the NFO, the Units of the Scheme will be listed on the BSE, where investors can buy or sell units at market prices.
A close end hybrid fund helps you preserve your capital, with a marginal exposure to equities. This has the probability to give you higher risk adjusted returns.
Why not invest
Since the fund is close ended, liquidity will be very low. In case you wish to sell units you may have to do so at a discount to the NAV.