MUMBAI:
Axis Mutual Fund, one of the fastest-growing fund houses in India, today announced the launch of their new fund offer – ‘Axis Floater Fund’. The fund offers efficient solutions for short term investors looking to navigate a possible rising interest rate environment and also an ideal parking solution for their investment. The fund will be actively managed by Aditya Pagaria, Fund Manager –Fixed Income.
Introducing ‘Axis Floater Fund’
A well-crafted portfolio with an efficient way to park money: The new fund offer is crafted with a dynamic mix of high-quality instruments & AA issuers. It targets a portfolio average maturity of 6-18 months. This makes it suitable for investors looking to park short-term surplus funds or for those looking to limit the interest rate risks in their debt portfolio
Superior risk rewards: The fund attempts to offer better risk reward opportunities over other traditional alternatives in the short term space
Managing interest rate risks: Axis Floater Fund is an actively managed portfolio of floating rate instruments and fixed rate bonds that are swapped for floating rate characteristics through swaps. The floating rate strategies aim to manage interest rate risks by investing in bonds where the coupon is linked to market movements
Portfolio structure: Target 80% AAA/A1 + along with 20% allocation to AA issuers to capture opportunities across the debt market
Why Now?
Interest rates are at pivotal junction. With improving macro-economic fundamentals and a strong global economic sentiment, India is poised to gradual get back to becoming one of the fastest growing large economies of the world. As inflation edges higher, we believe that we are at the bottom of the interest rate cycle. As the RBI looks to roll back accommodative momentary policy markets have prompted RBI actions and priced yield curves higher.
Historically, such events, have led to a sharp and swift rise in short term rates as seen in the 2008-2011 and 2012-14 interest rate reversals.
For investors looking at short to medium term debt investment solutions, floating rate strategies make for an ideal solution to earn market linked inflation beating returns as well as to navigate a rising interest rate scenario.
Announcing the launch of the NFO, Chandresh Nigam, MD & CEO, Axis AMC, said “At Axis AMC, we have always believed in being ahead of time and introducing a product bouquet which gives our investors promising avenues for wealth creation. Every investor holds different goals, risk appetite and a different time horizon to achieve the set goals. Therefore, we aim at personalising and intelligently crafting multiple investment options to fulfil the needs of our investors.”
“The economic fundamentals are improving gradually and returning to normalcy. These are early signs of a pickup in demand and we believe we are the cusp of a new growth cycle. The country is also likely at the bottom of the interest rate cycle and we expect rates to see a gradual rate hike cycle in the medium term. With the launch of this fund, we believe that we will provide an efficient solution for short-term investors looking to navigate a possible rising rate environment.”
