Axis AMC eyes Rs 200 crore from new state securities-focused fund

Axis Mutual Fund expects to mop up at least Rs 200 crore from its new fund offer that tracks the Nifty' SDL or state government securities during the primary sales period.

The open-ended target maturity index fund will invest in the constituents of the Nifty SDL September 2026 index, the fund house said in a statement on Friday.

The New Fund Offer (NFO) opens on Friday and closes on November 16, it said without disclosing how much the company is targeting to garner. However, Raghav Iyengar, the chief business development officer at the fund house, told PTI that the company has set an internal target of garnering at least Rs 200 crore during the NFO.

The company said the fund, which has no exit load, will be managed by Aditya Pagaria. Being a debt fund backed by the respective states, the NFO is an open-ended target maturity index fund and has relatively high interest rate risks and relatively low credit risks.

The investment objective of the scheme is to provide investment returns corresponding to the total returns of the securities as represented by the Nifty SDL Sep 2026 index.

Target maturity funds allow investors to access specific maturity buckets and the transparent nature of such an investment strategy provides investors a clear picture of the portfolio and the instrument mix. As a passive fund, the scheme replicates a designated index created by reputed index providers.

State securities are one of the most liquid instruments traded in the debt market and they typically trade at a premium to comparable central government securities (G-secs) with the average yield being 40-50 basis points higher than G-secs.