Axis Nifty 500 Index Fund A Long Term Compounding Opportunity!

The Nifty 500 Index is a unique index that is gaining attention from investors. Nifty 500 tracks the largest 500 companies on NSE. This means that the universe of stocks being tracked by this index covers a significant portion of the overall Indian listed company’s market.

For investors looking to dive into the dynamic world of the Nifty 500, the Axis Nifty 500 Index Fund NFO can offer a convenient entry point.

Here are some of the benefits of investing in a Nifty 500 Index Fund:

Wider Market Cap Coverage

In terms of market capitalization, the Nifty 500 index covers >90% of the total free float capitalization of the stocks listed on the National Stock Exchange (NSE).

Source: NSE Research Paper, Axis MF Research. *Percentage Market Cap of Index to Total Market Cap of NSE listed equity shares, based on 6 months ended March 28, 2024. ^Weight for 2024 is as of last trading day of Mar-2024. Weights are calculated based on Free-Float Market Cap. Past performance may or may not be sustained in the future. Sectors/Attributes(s) mentioned above are for the purpose of illustration and should not be construed as recommendation.

This means that the index tracks the performance of a significant majority of the overall listed market.
Investors who invest in a Nifty 500 index fund can gain exposure to a wide market cap coverage through a single fund.

More Sector Level Diversification

The Nifty 500 index constitutes companies that operate in 21 different sectors of the Indian economy. This means that any investor who invests in a Nifty 500 index fund gains exposure to a very diversified portfolio of stocks.

Just some of the sectors that are covered by this index include banking and finance, information technology, energy, pharmaceuticals, automobile and auto ancillaries, and a lot more. Most of the important large sectors of the Indian economy are part of this index which provides more diversification for the investor.

Source: niftyindices.com, NSE, Axis MF Research. Data as of March 28, 2024, as per Nifty Indices while paper on Nifty 500.

More Stock-level Diversification
The Nifty 500 index is not just diverse in terms of the sectors in which the companies operate.

The index tracks the performance of a diverse range of companies within each sector as well. For example, the index covers all kinds of companies in terms of market capitalization. It covers small-cap stocks, mid-cap stocks, as well as large-cap stocks.

Source: NSE (Index Factsheet), Axis MF Research. Data as of 31st May 2024. Large Cap is representative of stocks constituted in Nifty 100, Mid Cap as in Nifty Midcap 150 and Small Cap as in Nifty Smallcap 250

As we mentioned earlier, the Nifty 500 consists of stocks from 21 sectors. On average, the Nifty 500 provides exposure to more than 20 companies from each sector. This translates to more diversification for the investor.

Better Risk-Reward Ratio

As mentioned earlier, the Nifty 500 index provides high levels of diversification in terms of both the number of sectors and the diversity of companies within each sector. Since the level of diversification is more, this may mean that the risk associated with investing in a Nifty 500 index fund is lower.

Further, the Nifty 500 has historically delivered higher returns than inflation and traditional fixed-income options. This can mean a better risk-reward ratio for investors.

Higher Potential for Long-Term Returns

Since 1995, the Nifty 500 index has grown at an average CAGR of 12.6%. Despite the fact that historical returns do not guarantee future performance, long-term investors can consider investing in a Nifty 500 index fund for a long-term horizon.

Even though there have been several crashes in the performance of the Nifty 500 over the years (the dot.com crash, the 2008 financial crisis, and the pandemic crisis), the index has managed to recover and gain in the aftermath of each of these crises.

Source: NSE, Axis MF Research. Data as of 31st May 2024. Past performance may or may not be sustained in the future. CAGR Returns from 30th June 1999 to 31st May 2024. The performance figures pertain to the index and do not in any manner indicate the returns/performance of the scheme.

Wrapping Up

Overall, Nifty 500 index funds can offer a good opportunity for investors who are looking for balanced performance. With Axis Nifty 500 Index Fund, investors can tap into the potential growth opportunity. The historical performance of the index has been noteworthy and the index provides high levels of diversification that lowers the risk associated with the investment.

Please refer to SID/KIM for detailed information.

Disclaimer: Past performance may or may not be sustained in the future. Sector(s)/ Stock(s)/ Issuer(s) mentioned above are for the purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as recommendation.

NSE Disclaimer: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the SIDs / Schemes of Axis MF has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the SIDs. The investors are advised to refer to the SIDs for the full text of the 'Disclaimer Clause of NSE.

Axis Nifty 500 Index Fund is not sponsored, endorsed, sold or promoted by NSE Indices Limited (formerly known as India Index Services & Products Limited (IISL)). NSE Indices Limited does not make any representation or warranty, express or implied (including warranties of merchantability or fitness for particular purpose or use) and disclaims all liability to the owners of Axis Nifty 500 Index Fund or any member of the public regarding the advisability of investing in securities generally or in the Axis Nifty 500 Index Fund linked to Nifty 500 TRI or particularly in the ability of the Nifty 500 TRI to track general stock market performance in India. Please read the full Disclaimers in relation to the Nifty 500 TRI in the in the Offer Document/ Prospectus/ Scheme Information Document.

The fund manager(s) may or may not choose to hold the stock mentioned, from time to time. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s).

Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs.1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme. This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.