Should you invest in the newly launched Axis Global Innovation Fund of Fund?

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Axis Mutual Fund on 6 May announced the launch of a new mutual fund scheme — Axis Global Innovation Fund of Fund. The mutual fund scheme will offer Indian investors an opportunity to participate in a globally diversified equity portfolio that can complement their Indian equity allocation.

According to an Axis Mutual Fund press release, “This mutual fund scheme will provide investors with an opportunity to invest in Schroder International Selection Fund (SISF) Global Disruption, a global equity fund that aims to provide long-term capital growth by investing in companies worldwide that benefit from disruption.

Disruptive growth is an opportunity for investors to capture significant value creation over time. Chandresh Kumar Nigam, Chief Executive Officer, Axis Mutual Fund said, “Most investors in Southeast Asia, for example, invest 30-50% outside their own geography. In India, it is just 1-2%. India has been affected by covid , but its markets have not reacted much. “However, there could be other events that impact us adversely,” Nigam said.

Subscription date

The new fund offer opens for subscription from 10 to 21 May. The minimum application will be Rs5,000. The benchmark against the scheme will be MSCI AC World (Net TR) (INR).

Scheme type

It is an open-ended fund of fund scheme that will invest in SISF Global Disruption.

SISF Global Disruption seeks to provide capital growth by investing in innovative companies that are redefining their industries or are successfully adapting to change. The fund is actively managed to access multiple disruption themes globally, including environment, automation, healthcare, fintech, communication, food and water, new consumer, digitalization, and e-commerce.

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, according to the Axis mutual fund press release.

Who should invest?

The scheme will be investing primarily in shares / units of the underlying fund, which in turn invests in global equities. Axis asset management company has estimated an expense ratio of 2.25%.

“Since the offering is thematic, and it is, therefore, highly risky, investors with high-risk appetite and wanting international allocation / global diversification may look at this offering,” said Amol Joshi, founder, Plan Rupee Investment Services. “However, for most common investors, a scheme that tracks a broad index (locally or globally) is more suitable. For instance, S&P 500 or US Bluechip funds,” said Joshi.

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